You have to hand it to AMC Entertainment (NYSE:AMC). This struggling company truly has done everything in its power to keep its head above water, even as the storm continues to rise. The controversial meme stock has stayed relevant largely due to its status as a favorite among the r/WallStreetBets crowd. These traders refuse to accept the fact that AMC stock isn’t the new GameStop (NYSE:GME) and that another short squeeze isn’t coming.
Their faith in this fallen company is admirable but unquestionably misguided, as evidenced by the stock’s poor performance. If anyone needs more proof, they should look at AMC’s recent deals to stream exclusive content from two of pop music’s biggest superstars, then back to how AMC stock has performed since these releases.
The writing is on the wall. Neither Taylor Swift nor Beyoncé have been able to help AMC stock make any real progress. And if the two queens of the music industry can’t help a struggling company, who’s left to be the hero? We all know the answer, but let’s dive into the reasons why.
A Cruel Summer for AMC Stock
Partnering with both Swift and Beyoncé makes perfect sense on paper. These two superstars turned many heads with the incredible number of concert tickets they sold this year. A report from Morgan Stanley noted that spending on both their concert tours, as well as the releases of the popular Barbie and Oppenheimer films, would add roughly $8.5 billion to the economy in Q3 2023. Two-thirds of that impressive sum would likely be due to concert ticket sales alone. All this sounds like a movie theater chain that streamed both movies and exclusive concerts from both artists would have enjoyed a record-breaking season. But AMC stock is down more than 40% over the past month and 80% for the past six.
To borrow a phrase from Swift, it has been a “cruel summer” for AMC stock. But that might honestly be an understatement. The theater chain entered the summer season loaded with positive catalysts but nothing that helped it make even slight progress. That fact is too important to be overlooked because it highlights what experts have been saying for months: AMC stock has no hope of recovering. Both artists have a proven history of driving economic growth in just the past year alone. As Dan Fleetwood, president of QuestionPro Research and Insights, stated:
“If Taylor Swift were an economy, she’d be bigger than 50 countries; if she was a corporation, her Net Promoter Score would make her the fourth most admired brand, and her loyalty numbers mimic those of subjects to a royal crown. It’s all a testament to her focus on the fan experience.”
Meanwhile, Beyoncé’s Renaissance tour proved so successful that it led to the coining of the term “Beyoncé Bump” to describe the growth it drove for local businesses. LGBTQ-owned businesses companies saw a whopping increase of 194% in consumer interest as of July 19, 2023. Experts have praised it as a driving force of economic growth that came at a critical time for the U.S. and beyond.
Time to Roll Credits on AMC
AMC’s leadership did the right thing by providing viewers with access to exclusive content from world-dominating artists. But as the dust settles, it’s clear that neither singer can help save this company. And if the combination of both Taylor Swift and Beyoncé can’t help AMC, then nothing can. As InvestorPlace contributor Larry Ramer reports, Beyoncé’s film is expected to open at AMC theaters on Dec. 1, 2023. But news of this catalyst hasn’t helped AMC stock. As of this writing, it is down about 0.5% for the day. For context, AMC stock is down 41% for the past month and 73% year-to-date.
There will always be contrarian retail traders who bet on AMC and refuse to abandon ship, no matter how much their shares fall. But if pop music’s two biggest superstars can’t save this failing meme stock, it cannot be saved.
On the date of publication, Samuel O’Brient did not have (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.