Today, the broader stock market is gaining in a big way aftera key announcementfrom the U.S. Food and Drug Administration (FDA). The FDA has just given Pfizer(NYSE:PFE) full approval for its Covid-19 vaccine. Indeed, this announcement has provided the overall market a big shot in the arm today. However, for investors in AMC Entertainment(NYSE:AMC) and AMC stock, this news is an even bigger deal.
Indeed, AMC stock has been a key pandemic reopening play for investors. As vaccine rollouts have accelerated, so too have mandates been lifted on indoor entertainment activities. AMC patrons have come flocking back to the movies, though perhaps not at the speed at which investors were expecting. The hope is that this formal approval will provide the impetus for even more individuals to get vaccinated. Such a move would be beneficial for all stocks benefiting from the pandemic recovery. Additionally, investors pricing in movie theater closures this fall as a result of the delta variant are now rethinking their positions.
Furthermore, more AMC patrons may feel comfortable visiting movie theaters again in such an environment. Investors in AMC are pricing in this bullishness today, driving AMC stock more than 10% higher at the time of writing.
Let’s take a look at another reason why AMC is popping today.
AMC Stock Surging on Positive Box Office Data
In addition to positive forward-looking expectations for the cinema industry this fall, AMC stock has gotten a boost from astrong box office showing this past week.
The debut of Free Guystarring Ryan Reynolds brought in $28.3 million this past week. Additionally, this movie’s second-weekend gross of $18.8 million was very strong.
Compared to many blockbusters released during pre-pandemic times, these numbers aren’t earth-shattering. However, reports have noted that this movie’s second-weekend gross was greater than its expected take for its debut weekend. That’s a great thing for investors in AMC stock. The better these movies do at the theater, the lower the likelihood movie producers choose to go straight to streaming.
Indeed, the rise of non-theatrical releases during the pandemic has some investors in AMC stock worried. The idea that a whole industry could be made obsolete has become more real during the pandemic. Accordingly, this recent box office success is being cheered in a big way by investors today.