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Motley Fool Hidden Gems Investing

AMC’s Drama and the Future of Restaurants

Motley Fool Hidden Gems Investing

The Motley Fool

Business, Investing

4.33.1K Ratings

🗓️ 4 June 2021

⏱️ 39 minutes

🧾️ Download transcript

Summary

AMC Entertainment takes investors on a wild ride. DocuSign, Five Below, Lululemon, and Zoom Video report strong earnings. Twitter launches a subscription service. Etsy makes a big buy. And enterprise search company Elastic gets a nice bounce on earnings. Motley Fool analysts Emily Flippen and Jason Moser discuss those stories and share two stocks on their radar: Brazilian payment processor StoneCo and hardware and software maker Trimble. Plus, restaurant industry expert David Henkes talks winners and losers, the importance of chicken sandwiches, and why investors should expect more restaurants to go public.   Looking for more stocks for your radar? Get 50% off our Stock Advisor service just by going to http://RadarStocks.fool.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0

Everybody needs money. That's why they call it money.

0:07.0

From full global headquarters, this is Motley Fool Money.

0:19.0

It's a Motley Fool Money radio show. I'm Chris Hill joining me this week's senior analyst, Emily Flippin and Jason Moser.

0:25.0

Good to see you both.

0:26.0

We have the latest headlines from Wall Street. We'll get the latest on the restaurant industry from our guest David Hankus.

0:33.0

And as always, we've got a couple of stocks on our radar.

0:36.0

But we begin with the stock of the week, AMC Entertainment shares of the movie theater chain doubled this week.

0:44.0

Despite the fact that on Thursday, the company filed to sell more than 11 million shares, which sent the stock falling more than 30% that day.

0:53.0

Emily, management is pretty clear about the fact that the stock price is divorced from the reality of the business of AMC Entertainment.

1:04.0

What goes through your mind when you're watching all of this madness play out?

1:08.0

Well, the first thing that goes through my mind is that management is smart how they've played this.

1:14.0

They've raised over $500 million, thanks to the surge in traders, and over 80% of AMC shares are now owned by retail investors.

1:24.0

So they're certainly catering to that target demographic here. But that's actually not what's causing this crazy pop.

1:31.0

And it's actually a little bit more confusing than what media makes it out to be, which is just that all these people are flooding into AMC.

1:38.0

That's why the stock is up in the hundreds of percent and only a few days. It's really more about options and how options are playing on AMC.

1:46.0

It's a complicated process and to keep it short, essentially, options are causing and the hedging process for options are causing huge increases in the share price that are definitely going to be temporary.

1:59.0

And what's really sad about this whole situation is that oftentimes the people who end up suffering the burden the most are those 80% of retail shareholders and a business like AMC.

2:09.0

Let's move on to some earnings then. We're going to start with DocuSign up more than 15% on Friday after first quarter profits and revenue were higher than expected.

2:18.0

The electronic signature company also provided upbeat guidance. And Jason, I know this company did well during the pandemic when everyone was doing business remotely.

2:28.0

But DocuSign really seems like it is set to thrive during the great reopening as well.

2:34.0

Oh, yeah. Yeah. I mean, it feels like this has gone from just a helpful way to get through a difficult time to absolutely just the way people want to do business now.

2:45.0

I mean, it's very hard to find anything wrong with what's going on here with DocuSign. It's not just the e-signature company anymore.

...

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