AMC Entertainment Holdings Inc.’s stock rose 2.4% before the opening bell on Tuesday, lifted by the meme stock darling’s deal with Zoom Video Communications Inc. to turn some of the movie-theater chain’s locations into so-called Zoom Rooms.
The companies announced the deal late Monday. Shares of AMC
which reports its third-quarter results after market close on Tuesday, ended Monday’s session down 5.7% before rallying in extended trading. Zoom’s ZM stock, which gained 2.8% during Monday’s session, was up 0.4% before the opening bell on Tuesday.
Zoom Rooms are workspaces for hybrid teams, according to Zoom. “This combines the excellent experience of Zoom with the comfort and state-of-the-art sight and sound technology of AMC’s modern and centrally located theaters,” the companies said, in a statement released after market close on Monday.
See Now: AMC teams with Zoom to turn movie theaters into ‘Zoom Rooms’
Zoom Rooms at AMC will be launched in up to 17 major U.S. markets in 2023. The Zoom Rooms will be available in three-hour blocks, with typical auditorium sizes expected to be between 75 and 150 seats, depending upon the theater.
Food and beverages, possible movie viewings, and concierge-style meeting services will also be available at an added cost, the companies said.
“Now through this partnership of Zoom and AMC, we have the best of both worlds — the spectacular communications platform of Zoom combined with the comfort, size, scale, and state-of-the-art sight and sound capabilities of AMC’s centrally located theatres,” said AMC Chief Executive Adam Aron in a statement. “This creates an all-new product in major cities across the U.S. for companies and meeting planners.”
AMC’s third-quarter results on deck: Will the meme-stock darling shake off concerns of a box-office slowdown?
The movie-theater operator was a victim of pandemic-era lockdowns before attaining a meme-stock status that sent its stock skyrocketing last year, then plummeting back to earth.
No stranger to bold moves, AMC stunned Wall Street earlier this year when it made a $27. 9 million investment in Hycroft Mining Holding Corp.
a gold and silver miner that operates far outside AMC’s core business.
In August, the company’s AMC Preferred Equity Units, or APEs
made their trading debut, sparking volatility and heralding the latest chapter in an eventful journey that took the cinema chain from a beleaguered pandemic victim to a meme-stock phenomenon.
Also see: AMC missed ‘golden opportunity’ to pay down $5.4 billion debt with APEs, says analyst
AMC reports its third-quarter results amid concerns about a box-office slowdown in August and September. In August, when AMC reported its second-quarter results, Aron spoke of the “dearth” of big titles being released in that month and September, adding that “things will slow for several weeks.”
Analysts surveyed by FactSet are looking for AMC to report a net loss of $238 million, or 20 cents a share, compared with a loss of $224 million, or 27 cents a share, in the same quarter of last year. The company is expected to report sales of $961 million, up from $756 million in the same period last year, according to FactSet.
AMC’s admissions revenue is expected to be $552 million, compared with $421 million in the same period last year, according to FactSet. Analysts project concessions sales of $324 million, up from $263 million in the prior year’s quarter.
See now: Are you tempted to buy AMC’s new APEs? Be prepared to lose everything, the company warns
Of eight analysts surveyed by FactSet, three have a hold rating and five have a sell rating for AMC.