David Vs. Goliath: If You Had $5,000 Right Now, Would You Put It On Netflix Or AMC?

Every week, Benzinga conducts a survey to collect sentiment on what traders are most excited about, interested in or thinking about as they manage and build their personal portfolios.

This week we posed the following question to over 1,000 Benzinga visitors on entertainment company investing:

If you had $5,000, would you put it on Netflix Inc NFLX or AMC Entertainment Holdings Inc AMC right now?

• Netflix: 41.2%
• AMC: 58.8%

See Also: AMC Entertainment CEO Adam Aron On How The Company Is Playing 'Offense'

Over-the-top content platform and production company Netflix received 41.2% of support in this week’s study.

Last month, Netflix reported a second-quarter EPS of $2.97, which beat the analyst consensus estimate of $3.15. Netflix also reported sales of $7.34 billion, which beat the analyst consensus estimate of $7.32 billion.

From Netflix’s earnings report last month: “In Q2, revenue increased 19% year over year to $7.3 billion, while operating income rose 36% year over year to $1.8 billion. We finished the quarter with over 209 million paid memberships, slightly ahead of our forecast.”

“COVID has created some lumpiness in our membership growth (higher growth in 2020, slower growth this year), which is working its way through. We continue to focus on improving our service for our members and bringing them the best stories from around the world,” the company reported.

What’s more, is that Netflix revealed last month details on a foray into video games. Netflix says games will be included at no additional subscription cost.

“We’re also in the early stages of further expanding into games, building on our earlier efforts around interactivity (eg, Black Mirror Bandersnatch) and our Stranger Things games. We view gaming as another new content category for us, similar to our expansion into original films, animation and unscripted TV,” the company told investors. 

“Games will be included in members’ Netflix subscription at no additional cost similar to films and series. Initially, we’ll be primarily focused on games for mobile devices. We’re excited as ever about our movies and TV series offering and we expect a long runway of increasing investment and growth across all of our existing content categories, but since we are nearly a decade into our push into original programming, we think the time is right to learn more about how our members value games,” the company reported.

Netflix is trading higher by 2.5% over the past six months, up 4.6% on a year-to-date basis and higher by 11.9% over the past year.

Meanwhile, 58.8% of traders and investors said they would invest into the world’s largest theatre chain AMC.

Last month, AMC reported better-than-expected second-quarter EPS and sales results. The company notably reported it has liquidity available in excess of $2 billion.

AMC reported quarterly losses of 71 cents per share, which easily beat the analyst consensus estimate of a loss of 93 cents per share. AMC also reported quarterly sales of $444.7 million, which rather easily beat the analyst consensus estimate of $375.3 million.

Adam Aron, Chairman and CEO of AMC commented, “The second quarter of 2021 was transformational for AMC. We raised yet another $1.25 billion of new equity capital (before commissions and fees) in the quarter, boosting our quarter ending liquidity to more than $2 billion (including cash and undrawn revolving lines of credit) which is about double the previous highest ever such mark in AMC’s 101-year history.”

As of June 30, 2021, AMC operated 593 domestic theatres representing 100% of its domestic theatres and 335 international theatres representing approximately 95% of its international theatres. 

AMC says the majority of international theatre operations were suspended for the first two months of the second quarter and did not reopen until early June.

Due to a series of epic short squeezes amid high retail investor interest, AMC shares are up a marked 425% over the past six months and an eye-popping 1,612% year-to-date. 

Adam Aron has been arguably one of the most open and willing CEOs to listen to trader and investor feedback for the brand amid marked retail investor ongoing interest in the company.

Aron added in the second-quarter earnings report, “AMC’s journey through this pandemic is not finished, and we are not yet out of the woods. However, while there are no guarantees as to what the future will bring in a still infection-impacted world, one can look ahead and envision a happy Hollywood ending to this story. We would like to think that someday when a movie is filmed about AMC and COVID, its title will be one compelling word, ‘Recovery.’ But, only time will tell.”

This survey was conducted by Benzinga in August 2021 and included the responses of a diverse population of adults 18 or older.

Opting into the survey was completely voluntary, with no incentives offered to potential respondents. The study reflects results from over 1,000 adults.