27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
AMC Entertainment Holdings Inc (NYSE:AMC) is reportedly in the crosshairs of Amazon.com Inc (NASDAQ:AMZN), as the e-commerce giant has long-coveted a theater chain to bolster the prestige of its movies.
According to one analyst, it's looking at the wrong company.
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"Amazon does not need 10,000 screens to enter the theater business," Wedbush analyst Alicia Reese says. In fact, Amazon "would be better off buying a piece of Cineworld," she added.
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Recall how Cineworld (OTC:CNNWQ), the U.K. parent company of Regal, went bankrupt in September 2022.
Amazon could probably acquire each of Cineworld's theaters for only $200,000, Wedbush argues.
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That's 1,000 screens for $200 million, total.
"Why would Amazon instead choose to buy 10,000 screens for $8 billion?" Reese asks. "The bottom line is that Amazon has no interest in being in the theatrical exhibition space to make money. Strategically, they may want a place to exhibit their own films, but 1,000 screens is plenty, and 200 is probably enough."
Amazon founder and former CEO Jeff Bezos recently told investment advisors to look into a potential acquisition of AMC. If the company owns theaters, it can showcase Prime movies and other Amazon services.
If Seattle-based Amazon were to ink a deal with Cineworld, it would certainly hurt AMC, whose CEO, Adam Aron, recently stressed the importance of raising cash and reducing debt for the company’s survival. The Leawood, Kansas-based company burned through $830 million in cash in 2022 and posted a negative free cash flow of $105 million in the fourth quarter.
AMC Price Action: AMC shares dipped 3.41% Wednesday afternoon at the time of writing to $4.96, according to Benzinga Pro.
Next: AMC CEO Is In Touch With NYSE, FNRA About Stock Staying In 'Threshold List' For 'Failure-To-Deliver'
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.