Disney needs more than a wish upon the stars to break free from its animation slump. Its latest animated feature, "Wish," promoted as a tribute to 100 years of storytelling, stumbled at the box office over the Thanksgiving weekend, putting downward pressure on AMC stock.
Walt Disney's most recent film had a lackluster debut, landing in third place at the box office behind the new Hunger Games installment and Napoleon. This disappointing performance over the Thanksgiving weekend wasn't what Disney had wished for, and AMC Entertainment Holdings Inc. bore the brunt, experiencing a 1.5% dip in stock value on Monday, pushing the price to a new record low at $6.80 per share.
It's uncommon for Disney to lag during the Thanksgiving box office, having consistently released top-grossing animated films for over a decade during the Wednesday-to-Sunday timeframe and setting records for the highest-grossing openings for films released on Thanksgiving.
Disney's latest animated venture opened with a modest $19.5 million over the traditional weekend, falling short compared to the predicted $35 million and $31.7 million over its first five days instead of the anticipated $50 million.
This recent decline adds to a lackluster year for AMC stock, which has plummeted by 81%, marking its worst performance in a decade.
AMC has faced various challenges, including pandemic lockdowns, Hollywood strikes, and being a target for short-sellers due to its meme-stock allure.
One significant factor contributing to this substantial downturn is an aggressive stock sale. In September, the company announced a plan via a filing to the SEC to sell up to 40 million in additional common shares, with volume indicator skyrocketing to 84.9 million shares during the sell-off. AMC stated that the fresh capital would be used to strengthen its liquidity reserves and alleviate some of its debts. At that time, AMC carried approximately $9.5 billion in debt and lease obligations, while its market cap hovered around the $1.4 billion mark.
The scarcity of moviegoers has severely impacted the theater chain and continued a relatively unproductive period for the movie industry. As Covid-19 restrictions were largely lifted, a new challenge emerged. In the U.S., where major studios and agencies are based, the inflation rate is high, leading to an increase in production costs. Therefore, almost 50% of Americans express a greater preference for watching movies at home as they find it too expensive to see movies in theaters.