Why Amazon buying AMC doesn't make sense, analyst argues

Amazon (AMZN) buying AMC (AMC) would be a huge mistake, according to one Wall Street analyst. Speculation spread on Tuesday of a potential bid from the tech giant after a substack post from The Intersect.

Shares of AMC spiked more than 15% on the news Tuesday, before Pachter and Wedbush wrote to clients the deal was “unlikely.”

Pachter highlights there’s been no indication that AMC wants to sell itself as one of the key reasons the deal is unlikely. And even if AMC did want to sell itself, Amazon could find a more attractive option anyway, according to Pachter. The analyst points to Cineworld (CINE.L), which filed for bankruptcy earlier this year, as a better potential target for Amazon.

Given the bankruptcy, Cineworld’s screens could sell for roughly $600 million less than an AMC screen and therefore would be a significantly better purchase.

In the video above, Yahoo Finance’s Dave Briggs and Seana Smith discuss the potential purchase with Pachter.

Key Video Moments

00:00:05 - Why a Cineworld purchase makes sense

00:01:18 - Pachter explains case for a downgrade on Amazon.