Good morning.
Yesterday’s big news in the U.S. Was the resignation of New York Governor Andrew Cuomo and the Senate passage of a bipartisan infrastructure bill. But I skipped both in order to read the transcript of Monday’s AMC earnings call, which was one of a kind. I’ve sat through a lot of these calls over the years, and find most to be dry, scripted affairs, with analysts trying to sound smarter than they are, and executives trying to sound more successful than they are.
But AMC has crossed through to the twilight zone. It has a new set of retail owners who aren’t interested in GAAP accounting or discounted cash flow or IRR or even whether the company is ever going to make money. Their burning questions: Would AMC consider partnering with GameStop—the other favorite of the meme stock crowd? Would it consider a return to drive-in theaters? Would it soon start accepting cryptocurrency? And why doesn’t it sell more AMC merchandise to its growing fan base, or stream more live concerts to its theaters?
CEO Adam Aron was loving it. Aron is a “mature” CEO—which is to say he is two months older than I am. He formerly ran Starwood Hotels, Vail Resorts, and Norwegian Cruise lines. But the AMC fan-investors have given him a new lease on life. He is holding special screenings for them in his theaters and talked on the earnings call about how he is engaging with them on Twitter. “My tweets, which I write personally, so far have been read more than 72 million times,” he said. “In addition, I’m actively following almost 2,000 people, who appear to be interested in AMC, to get a better sense of what they’re saying and thinking.”
Aron’s message to the fans: “AMC crushed It in Q2.” Well, okay, actually the company lost $151 million. But never mind. Revenues are up, Aron is pumped, the fans are excited, and the future is bright. Welcome to the new world of investing.
One point to note: Aron said on the earnings call that with 85% of his net worth now in AMC stock, he needs to “diversify my assets a bit.” He’s putting a plan in place to start selling off “a small percentage of my owned or granted shares” every month. If I were him, I would do the same. The current market madness won’t last forever.
More news below.
Alan Murray
@alansmurray
[email protected]
TOP NEWS
Budget passes
The Democrats $3.5 trillion budget resolution has passed in the Senate. The party-line-vote came early on Wednesday morning, just a day after the Senate also passed the $1 trillion infrastructure package. The budget's blueprint envisions creating programs for paid family leave, paid pre-K and community college, and the creation of a civilian "climate corps," as well as an expansion of Medicare. Part of the budget would be paid for through higher taxes on higher-income individuals and companies. Coins2Day
Bitcoin hack
It could be one of the biggest heists of the digital currency era. Poly Network says that a group of hackers had stolen thousands of crypto tokens from its systems, worth about $600 million. The hackers took dozens of different coins, and Poly Network called on "miners" and crypto exchanges to block any transfers. FT
"Carbon neutral" fossil fuels
Does "carbon neutral" gas exist? A team at TotalEnergies gave it a shot, looking to a Zimbabwean environmental project to offset the emissions from a carrier full of LNG. Of course, critics (and even people who helped with the deal) are saying the result is, simply, hot air. “It’s such obvious nonsense,”says one. Bloomberg
End of the free test
Germany has paid for enough free tests. Angela Merkel says the government, as of October, will no longer pay for free antigen tests for people who are eligible to get vaccinated, but choose not to. Since March, the country has provided residents with at least one free test a week. Some unvaccinated people, including those under 18, will still be eligible. NYT
AROUND THE WATER COOLER
The new Yelp review
Yelp has introduced a new set of filters, so customers can tell which businesses require vaccination for entry, and have fully-vaccinated staff (whether businesses provide these details is entirely voluntary.) So far, nearly 4,500 businesses have done so—but the website is now grappling with a wave of negative "review bombing" from users who disagree with the policies. Coins2Day
Make vaccines mandatory?
Bill George, the former CEO of Medtronic, argues in this piece for Coins2Day that it's time for CEOs to make vaccines mandatory for their employees: "Simply put, those who choose not to get vaccinated are putting the lives of those around them at risk. With such employees, employers should follow Marc Boom’s lead and ask them to resign or be terminated." Coins2Day
Coca Cola CO2
Exactly how much CO2 does a single can of Coca Cola emit? 346 grams, the company says. Increasingly, companies have to be able to say exactly how much carbon their products are responsible for, unleashing a wave of mind-boggling disclosures where the exact math is still under debate. WSJ
Delta v. Pret
Bloomberg's Pret a Manger index is back, and it's showing the impact Delta is having on lunchtime traffic in New York and London. In Manhattan, sales of sandwiches and berry bowls are declining; in London, despite the end of virtually all restrictions, they're not picking up. Bloomberg
Yesterday's edition of CEO Daily incorrectly claimed that active duty troops would be required to be vaccinated by mid-August. They will be required to be vaccinated by mid-September. I regret the error!
This edition of CEO Daily was edited by Katherine Dunn.
