There aren’t many things that could save AMC Entertainment (NYSE:AMC). But the down-and-out movie theater chain may have actually just encountered one. Specifically, AMC stock rose this afternoon on reports that Amazon (NASDAQ:AMZN) is exploring a deal with the company.
This troubled meme stock has seen some growth over the past week with its rising cost-to-borrow fee keeping investors focused on a short squeeze. Today, though, AMC stock has also seen actual growth on Amazon-acquisition speculation.
As of now, Amazon’s leadership has only reportedly “explore[d] acquisition plans.” Still, that has been enough to get many investors buzzing with anticipation.
What’s Happening With AMC Stock?
Today, AMC stock closed for the day up by about 13%. While shares did lose some momentum, today still marks the stock’s biggest single-day gain for the month.
That said, it’s important for investors to note that the force that drove shares up this afternoon is still pure speculation. The Intersect reports that “multiple senior sources” close to Amazon have confirmed that Jeff Bezos has deployed his investment advisors to explore options for a potential acquisition. Per The Intersect:
“The thinking is that Amazon can use AMC’s nearly 600 theaters across North America, Europe and the Middle East as ‘marketing weigh stations,’ said one Amazon insider. This would be used for promoting Amazon Prime movies for awards contention, cross-selling services such as grocery delivery, serving as local distribution hubs, and collecting crucial data from AMC’s annual 200 million moviegoing customers.”
By that logic, the deal makes plenty of sense for Amazon. And for a company as unstable as AMC, a buyout may be the best-case scenario.
Still, no word has come from AMC leadership on the potential deal. CEO Adam Aron, who frequently uses Twitter, has remained silent on the matter. The Intersect does note that Amazon has not yet submitted an offer to Aron’s team, however.
It may be premature for investors to celebrate. But if the two companies enter negotiations, that will likely push AMC stock up in the short term.
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On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.