AMC Entertainment (NYSE:AMC) is among the stocks seeing incredible upside momentum today. Shares of AMC stock are surging more than 8% in trading as investors price in an end to the long-standing writers’ strike.
Specifically, a tentative agreement has reportedly been made in principle to end the strike, which has lasted nearly 150 days. The Writers Guild of America noted that it received most of what it was looking for in its negotiations. And by the sounds of a comment from the Alliance of Motion Picture and Television Producers, it appears that’s the case. This deal will need to be ratified by the union, but the outcome appears to be positive on this front.
Now, investors are looking forward to an end to the ongoing actors’ strike, which should culminate in the resumption of TV and film production activity once resolved. This is a strong step in the right direction for everyone in the sector — and AMC stock is reflecting a more positive outlook as a result.
AMC Stock Surges on Tentative Deal for Writers
AMC CEO Adam Aron recently posted the following on X, the platform formerly known as Twitter, in response to the news:
“An announced deal ends the 5-month long Writers’ strike, pending an affirmative union member vote. Directors and Writers contracts now behind us. Only the Screen Actors Guild left to go […] The world’s movie theatres can celebrate. Extremely good news that progress is being made.”
This post certainly reflects the sentiment of many in the industry, who depend on production crews to get content put on the big screen.
Indeed, a resumption of production activity is a positive for AMC, as is the higher costs associated with production of streaming content. It will be interesting to see if more film production companies choose to put their movies out on the big screen for longer, in a bid to recoup some of the additional costs these contracts will undoubtedly put on their bottom lines. We’ll have to wait and see.
That said, there’s still some risk with buying AMC stock — or any film industry-related stock for that matter — on this news today. That’s because actors are still striking and there’s no guarantee this whole debacle will be wrapped up in short order. Accordingly, the bears may argue that today’s move is a temporary blip in a longer-term trend lower. Now, it’s time to see whether the bulls or bears will win this sentiment tug of war.
On the date of publication, Chris MacDonald 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.