The stock movement came suddenly and late in the session on a day when most stocks ended in the red, with the Dow and NASDAQ each falling about 2%. AMC Entertainment shares slipped nearly 4% to $5.12. AMC Networks closed at $28.34 on more than four times’ average volume.
The UK’s Daily Mail kicked off the roundelay with a report on Sunday that Amazon had held discussions with beleaguered theater circuit AMC Entertainment. While that scenario was never confirmed by anyone involved, it still sent shares of the exhibitor skyrocketing 40% and fueled at least 24 hours of think pieces by the business and entertainment press.
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CNBC anchor David Faber, it was noted on Twitter, theorized on-air Monday that the Daily Mail could have identified the incorrect AMC. A report Tuesday by CTFN, a specialist in M&A news, argued just that, citing two unnamed sources. It asserted a mixup of ticker symbols (AMC instead of AMCX), a not-infrequent occurrence with the companies.
In a further muddying of the waters, a pickup of the CTFN report on the Motley Fool website incorrectly identified AMC Networks as the operator of the premium network Starz, which is, of course, run by Lionsgate. Ah, aggregation.
An AMC Networks rep said the company “doesn’t comment on rumor or speculation.” AMC Entertainment and Amazon did not immediately respond to Deadline’s requests.
AMC Networks, originally known as Rainbow Media before being spun off in 2011, has been mentioned regularly as a potential takeover target over the years given its modest scale and secular trends in linear viewing and advertising. Nevertheless, like its peers in the cable programming space, the company generates enviable cash flow and has several large-scale franchises, chief among them The Walking Dead.
CFO Sean Sullivan was asked by a Wall Street analyst last week during the company’s quarterly earnings call about a possible effort to take the company private given the fact that shares had touched an all-time low. He pointed out a unique structural feature of AMC Networks that should always be considered when it comes to assessing its path forward, whether it’s a privatization or other strategic options. “We’re obviously a controlled company by the Dolan family,” Sullivan said. “And obviously, [CEO Josh] Sapan and I don’t speak for them.”
The Dolans, led by cable pioneer Charles Dolan, have long operated a collection of assets including Madison Square Garden, its sports teams, music venues and other media properties. In 2016, the Dolans closed a $17.7 billion deal to sell Cablevision, the property that served as the foundation of their empire for decades, to French conglomerate Altice.
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