Investors not scared off by movie theater chains
Of all the things I'd pick to invest in right now, a movie theater is pretty far down the list.
ut that’s why I’m writing about things like this and not actually shelling out the money, because the initial public offering of AMC Entertainment Holdings Inc., one of the biggest movie theater chains in the country, had a very good first day of trading Wednesday.
The IPO started at $18, the stock rose as high as $19.73, and settled in just over $19 by the end of the day, a successful first run for the Kansas-based entertainment company.
As independent movie theaters around the country teeter on the brink of insolvency — like MoviE-town in Elizabethtown, though it was just bought at auction — AMC is one company that has figured out how to stay successful — and apparently convince others its business model will continue to thrive.
Everyone knows fewer people are going to the movies. The number of tickets bought — not the revenue those tickets brought in — topped out at 1.55 billion in 2002 and dropped to 1.28 billion in 2011, according to The Numbers, a box office tracking website. It went up to 1.36 billion in 2012 (thank you, “The Avengers”), but looks like it will be around 1.3 billion in 2013.
Compared with 10 years ago, there are approximately 573,821 different ways to see a movie now, whether it’s through streaming services on your computer, phone, laptop or tablet, OnDemand on your TV or even Torrent websites (I’m not endorsing it, I’m just sayin’).
DVDs come out more quickly than they have in the past, so if you happen to miss a movie in its first couple weeks, you can just say, “Meh, I’ll Redbox it next month.” And yes, Redbox officially has become a verb.
The cost of a night at the movies has become cumbersome and then reaches even higher for 3-D and IMAX shows. Want to see “Anchorman 2” at the Harrisburg Mall on Saturday night? That’ll be $10, please. Maybe you’d rather a little fantasy? A ticket to the new “Hobbit” movie will run you $13 if you’re watching in 3-D.
And before you ask, yes, those prices are for one ticket. And I hope you don’t choke when you realized you just paid $4 for a pack of Twizzlers.
Yet somehow, AMC has made it work by providing a comfortable, exciting theater experience people want to return to. The surprising IPO could be the harbinger of another fact the banking and retail industries already know: That investors are comfortable opening their wallets for a big theater chain that has the financial wherewithal to make improvements to their product, but not so much the smaller, independent chains and theaters.
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From the shameless plug department: Fellow CPBJ reporter Jason Scott and I went through a somewhat painstaking exercise in early December. We took the 22 biggest publicly traded companies with their corporate headquarters in our five coverage counties and did a rigorous examination of their stock performance over the last five years, which just so happened to start at one of the most tumultuous times in American economic history.
We sliced and diced the info and came up with an extensive look at the stocks that we’ll be publishing in the Jan. 3 edition of the Journal for all to see. I found it fascinating to both compile and examine the data to see how things fit together on a balance sheet.
There is a lot more detail to get into with it, but you can check that out Jan. 3.
The cool part of the project is, at least 99 percent of the information came from public records, meaning anyone can find it. You wanna know how Rite Aid did in the fourth quarter of 2009? You can find it. Wanna know how much money a local bank that publicly trades stock lost in loans 10 years ago? You can find it. It’s all out there for any of us to find on the Securities and Exchange Commission website and other places.