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Placer.ai Sees Life Beyond Stock Surges for GameStop, AMC
Stock prices for GameStop and AMC Entertainment surged late last month as a group of Reddit users believed that Wall Street had undervalued both retailers and trading behaved accordingly. However, Placer.ai points out in a blog posting, “the stock price surges for GameStop and AMC had little, if not nothing, to do with their offline traffic, online traffic, or any other normal metric. However, they do provide a good opportunity to take a deeper look at two brands in flux.”
Neither chain fared well in terms of foot traffic during the pandemic, Placer.ai points out. For AMC’s movie theatres, “visits for the brand have been recovering, but never saw a visit gap smaller than 76.6% when comparing monthly visits year over year. Now this is understandable considering the unique impact the pandemic had on theatres and on the wider film sector.”
For GameStop, “the situation was also challenging. While the brand did recover to see the visit gap down to just 19.9% in August, the resurgence of COVID cases returned the visit gap to 27.1% in November and 24.1% in December.”
With vaccine distribution beginning to roll out, Placer.ai sees room for optimism in the months ahead. “For GameStop, the optimist’s thesis would likely center around the growing popularity of video games and the simultaneous growth in eGaming,” says Placer.ai. “This idea that an activity as digitally oriented as gaming could have a real offline pull may be novel, but it’s gaining traction.”
For AMC, which like other operators is waiting for the major studios to resume a steady supply of new product, “the optimistic case would likely center around a few things. Firstly, in periods of economic uncertainty, movies become an affordable means of escape and getting out of the house. And while COVID will hopefully end soon, the economic consequences will linger far longer, creating an opportunity for the chain to fill that role.
“Secondly, the ‘theatre’ concept has certainly not been maximized. While big blockbusters are an obvious draw, a subtle tear-jerking drama may actually be better consumed on Netflix at home. But what about sports? What about blockbuster TV shows and premieres? There’s a huge opportunity to expand the focus of theatres to reach into new areas where group viewing is a huge draw.”
For comments, questions or concerns, please contact Paul Bubny
- ◦Economy
