How to Profit From This “Millennial” Crisis
How to Profit From This “Millennial” Crisis by Justin Spittler – Casey Research
AMC Entertainment Holdings (AMC) is in big trouble.
AMC is the second-largest movie theater company in the U.S. It operates more than 1,000 theaters nationwide.
For years, it was a great business. But those days are over.
Last Wednesday, management said its box office sales fell 4.4% last quarter.
It also warned of a larger-than-expected loss for the second quarter. It blamed the bad results on weak “industry box office trends.”
In other words, people aren’t going to the movies much right now.
It doesn’t look like business will pick up anytime soon, either. After all, AMC only did $792 million in sales last month. That’s the company’s worst revenue figure for July in roughly a decade.
• AMC’s stock plunged 27% on the news…
It was the stock’s worst day ever.
But let’s be clear about something. AMC’s problems didn’t start last week.
The stock’s been in free fall for months.
Just look at the chart below. You can see that AMC’s down 57% this year.
It’s now trading at its lowest price ever.
• AMC’s management is doing everything it can to stop the bleeding…
It’s talking about slashing spending…laying off workers…and closing theaters earlier.
These emergency measures might buy AMC some time. But they won’t save the company.
You see, the movie theater business is in terminal decline.
Last year, Americans bought 38 million fewer tickets than they did in 2015. And attendance by millennials, or 18- to 35-year-olds, has declined in five out of the last six years.
If this doesn’t change soon, the industry will have a genuine crisis on its hands. And that’s exactly why I’m writing about it.
• You see, we love a good crisis at Casey Research…
That’s because they often present incredible opportunities. Sometimes, they even allow you to buy a dollar’s worth of assets for pennies.