AMC Entertainment Holdings is an American-based movie theatre chain, and is the largest movie theatre chain in the world. The company was founded in the year 1920, with its headquarters located in Leawood, Kansas. It has faced a lot of financial downturns due to the recent Covid-19 crisis. Let’s look at how AMC Entertainment has seen a surge in its share price of around 2,900% in this year.
The AMC Entertainment had seen a recent surge in its share price, which touched an all-time high on 2nd June 2021. The stock is considered to be a meme stock as the increase in the stock price was driven because of the hype over the social media channels.
The hot rally on the stock price is believed to be driven by the retail investors of Reddit. However, it is considered that one of the minor reasons for the surge in the share price is because certain investors are optimistic about the theatre chain as the Covid cases have come under control and the crowd would venture back into the theatres.
Share price of AMC Entertainment
The stock had seen a surge of around 120% on 2 June 2021, which hit the all-time high of USD 70 and fell slightly. The stock provided a return of around 90% in one session. The next day the rally was interrupted due to the company itself.
On 3 June 2021, the company had sold around 11 million shares and raised more than USD 500 million, where the investors did not stay with the company’s decision. The share had seen a fall on that particular day of around 18 % and closed at USD 51.34.
The company was under a potential bankruptcy in the year 2020 and now has seen a surge in its stock price of more than 3000% for the year 2021. In this quarter alone the stock price of AMC has provided a return of 500% and 140%, as seen in the first week of June 2021. The market capitalization of the company has increased to more than USD 32 billion.
Reason for the Extreme Rise in Share price of AMC Entertainment
Most of the analysts have agreed that the stock price of AMC has seen a surge not because of the fundamentals but because of the hype created on the social media platforms. They have conveyed that the surge in the price of stocks can be seen as long as it gets attention.
It is said that the retail investors on Reddit had joined back together in order to hurt the professional short sellers that were betting against the AMC stock. At the same time, AMC had announced that they would provide free popcorns to their new investors who had backed them when they visit AMC for watching a movie.
AMC Entertainment Warning to its Investors
The company’s stock price had been trading at 20% up and saw a fall of 18% soon after they announced the sale of 11 million stocks. The sale of 11 million stocks has further helped the company in increasing its share price to USD 584 million as capital.
AMC has also recognized the strangeness of the situation which was claimed by the experts. As a result, the company had issued an unusual warning to its shareholders. The company warned its shareholders against investing in its Class A common stock. It has conveyed that if the shareholders were ready to incur the risk of losing the entire amount invested in the shares or a partial amount, they could continue to stay invested.
The share of AMC has received a lot of attention from the Indian investors as well as those from South Africa. The largest theatre chain was one of the five most traded stocks on the American stock exchange on Vested Finance and Stockal. These are two Indian focused trading platforms, and AMC was much more popular than Tesla, Facebook and Shopify.
FAQ
What is the biggest movie theater company?
AMC Entertainment is one of the biggest movie theater company with 959 around the world.
Who are AMC Theaters’ competitors?
Regal, Cinemark, and Cineplex are some of the top competitors of AMC Entertainment.
What is the Revenue of AMC Entertainment?
The Revenue of AMC theatre in 2020 was 1200 million US dollars.
The Covid 19 pandemic has affected the startup ecosystem in India, as many startups found it difficult to find investors or get funds. Another industry that had a tough year was film industry, as the theaters were closed and many movie releases and productions were halted. Which is why many A-list Bollywood celebrities have resorted to investing in startups that are innovative and have potential.
Bollywood actresses like Alia Bhatt have not only backed and invested in startups but have also started their own ventures like the Ed A Mamma. These celebrities are known to have a large following and platform to reach out to more people, which is why it is no surprise as to why startups now prefer to be funded by popular celebrities or even for endorsements and investments. Over the past few years popular celebrities like Amitabh Bachchan, Aamir Khan, Salman Khan, Madhuri Dixit, Shilpa Shetty, Katrina Kaif, Deepika Pakudone, etc have shown considerable interest in funding the budding startups.
Having a celebrity to endorse and invest in the venture helps startup get noticed in the overcrowded startup space. When it comes to Alia Bhatt, the actor chooses to tread safely while making investments in startups or even starting her own venture. The Raazi actress, is known to invest in FDs and Bonds showing that she does have some business acumen and is not a risk taker when choosing the right startup to invest in.
Alia Bhatt is a one of the highest paid actress of India, known for her work in movies such as Gully Boy, Udta Punjab, Dear Zindagi, etc. Besides her acclaimed acting career, Bhatt has also launched her own line of clothing and handbags as well as a production company known as Eternal Sunshine and is the founder of the ecological initiative called CoExist. Here are the startups the actress has invested in:
The actor launched her own sustainable clothing apparel brand for children known as Ed A Mamma in October, 2020. The brand is said to make clothes only for children from the ages of 2 to 14 years old. Ed a mamma focus creating a clothing line that is environmentally friendly as they us natural fibers including plastic free buttons and trims. The company is self-funded by Alia Bhatt and is also a homegrown brand that goes with “Made In India” ethos. The brand is keen on making gender neutral t-shirts from organic cotton, while the products come in an affordable range of Rs 349 to Rs 1,499 where the starting price for organic t-shirt is Rs 799.
Another interesting fact about the brand is its waste management, the company reuses and recycles by using leftover clothing and cloth scrapes to make hair ties and potlis bags. The actor turned investor and now entrepreneur said that she specifically choose to make clothing line for children because they were already many fashion labels that made clothes for the age groups of 25 to 45 years old with high competition in the market. Which is why the Alia and her team decide to bridge the gap and create a made in India and a world class children clothing brand. The company hopes that with the brand the children will develop a love for nature at a young age.
About Ed a mamma
There a many ecofriendly benefits that come along with Ed a mamma products such as non-synthetic garments, buttons that are not made from plastic and even seed bombs that can help you grow a garden. In an interview Alia added that, “children are extremely caring and if you create planeteers at a young age you can help save the planet for years to come.” Alia has also launched CoExist which is an ecological initiative done to raise awareness on the welfare of the street animals. The Ed a mamma clothing line has already said to have sold over 70% of its first season’s collection through Firstcry.com which is an ecommerce website for kid’s products.
The brand is called Ed a mamma because Alia was inspired by a story series she was working on which was based on a little dog named Ed and his mamma a little girl. According to the actress the idea that she derived from this was to create a universe where the girl and the dog would go on adventures and save the planet from pollution. Another focus of the company was to make a homegrown brands for promoting the Made in India initiative. As a result the company manufactures its products in factories from Mumbai, Tripura and Kolkata among others.
Nykaa is a popular ecommerce platform that sells cosmetic and beauty products and is now a Unicorn Company. After actresses like Katrina Kaif, Alia Bhatt also invested an undisclosed amount to Nykaa in 2020. Nykaa which was established in 2012 has grown into a unicorn company with the help of many such investments. The company also received an investment of Rs 100 crore from Steadview Capital in May, 2020. Founded in 2012 by Falguni Nayar, Nykaa is the number 1 online marketplace for beauty and wellness products in India.
Nykaa logo and products
Nykaa now has a presence over 70 stores in India and also sells products from luxury brands like Tom Ford, Jo Malone London, Dior and Givenchy. The competitors of Nykaa competes with companies like Amazon Fashion, Flipkart Fashion and lastly Myntra. The website currently has over 5 million monthly active users and handles more than 1.5 million order per month. It also has a portfolio of more than 1,500 brands with a variety of 1.3 lakh products available on all its platform like website, apps and 70 offline stores.
Not only that Nykaa also offers a wide range of beauty and grooming products for men, along with Nykaa Pro the company also caters to their customers with beauty needs and special offers. They are also known for their in-house beauty products known as Nykaa beauty which makes cosmetics for lips, eyes, face and nails among other skin body care range. In an interview CEO and founder of Nykaa, Falguni Nayar confirmed Alia funding and added, “There are three reasons to why she wanted to invest in Nykaa, it was because it has Indian roots, it is founded by a woman and is the proof that the best in India can take on the best in the world.”
StyleCracker is another startup that is funded and backed by Alia Bhatt. StyleCracker is a fashion tech startup which was founded by Dhimaan Shah and Archana Walavalkar in the year of 2013. The company is known for its advancements in technology that develops the StyleCracker Box which helps people to get styled and look good. The company offers many options for personalization to its customers and has a huge opportunity when it comes to using technology to decode the fashion requirements of the Indian consumer. The company is known for celebrity customized boxes that usually contain apparel, cosmetics, accessories, and sometimes even footwear.
Alia Bhatt with the founders of Stylecracker Dhimaan Shah and Archana Walavalkar
The company has its headquarters based in Mumbai, Maharashtra. The procedure to get one these boxes start with the customers filling a form based on their like/dislikes and preferences, their personal details which are the measurement of their body shape, size and the budget range. Based on that information the customer receives a fashion box that is curated by many celebrity stylist. Once they receive the box, the customers have an option to keep or replace some or all items that they don’t like. The customized boxes are currently priced at Rs 1,999, Rs 2,999, Rs 4999 and even Rs 6,999, while the customers can choose boxes between the four.
The company has shipped over 50,000 customized boxes in more than 35 cities. In an interview Alia Bhatt disclosed on why she backed the startup company stating that, “What I like the most about Stylecracker is that it bridges the gap between the individual and the expert”. This company is the country first ever online personal styling portal that is designed to make life easier and convenient especially for the women that are busy or need experts help to improve their style. The website also allows women to choose between work wear, western style or even ethnic fashion among others and also have style for sizes up to 4XL.
Seema Banerjee
