AMC Entertainment Holdings Inc (NYSE: AMC) CEO Adam Aron sees upside for movie theaters following the tentative writers strike deal reached over the weekend.
What Happened: According to a New York Times report, the Writers Guild of America reached a tentative agreement with entertainment companies 146 days into a strike that has resulted in multiple production halts.
The report indicates the deal includes compensation increases for streaming content, studio concessions on minimum staffing for T.V. shows and guarantees related to AI's role in the industry.
Members of the Writers Guild, which represents more than 11,000 screenwriters, are expected to vote on the deal in the coming days.
"We can say, with great pride, that this deal is exceptional - with meaningful gains and protections for writers in every sector of the membership," the negotiating committee for the Writers Guild reportedly said.
Why It Matters: AMC's CEO took to X, formerly Twitter, to highlight the benefits for movie theaters following the news of an impending agreement.
"The world's movie theatres can celebrate. Extremely good news that progress is being made," Aron said in an X post.
Aron suggested that the potential deal creates significant upside for movie theaters, a welcome sign for AMC investors who have seen shares battle heavy selling pressure over the last few months.
The company enacted a 10-to-1 reverse stock split in late August and converted preferred equity shares (APE units) into common stock just one year after the APE units began trading. AMC also entered into an agreement to sell up to 40 million shares in an at-the-market offering at the beginning of the month, which contributed to weakness.
AMC shares are reacting positively to the Writers Guild deal news. The stock has trended higher since Monday's market open.
AMC Price Action: AMC shares were up 8.13% at $8.25 at the time of publication, according to Benzinga Pro.