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Why Imax Stock Jumped More Than 8% Today | The Motley Fool

What happened

Shares of larger-than-life cinema technologist Imax (NYSE:IMAX) closed Monday’s trading 8.4% higher, having risen 10.2% earlier in the day. The stock rose thanks to an impressive second-weekend showing of Walt Disney‘s (NYSE:DIS) latest superhero movie.

So what

Shang-Chi and the Legend of the Ten Rings dominated the box office in its second week, collecting domestic ticket sales of $35.8 million. By comparison, Free Guy from another Disney-owned subsidiary, 20th Century Studios, landed in second place with a domestic showing worth $5.8 million. Shang-Chi also pulled in $55.8 million of international ticket sales this weekend. Moreover, the title has not yet premiered in China, which is generally one of Marvel’s most fruitful overseas territories and a good fit for the martial arts themes and backstory of the titular character. In particular, Imax is looking forward to a strong Shang-Chi showing in China. The company collected 54% of its total revenue from the Greater China market over the last four quarters.

Now what

Action-packed Marvel titles are Imax’s bread and butter, giving investors another reason to get excited about Shang-Chi ‘s sustained success. Imax screenings accounted for 9.4% of the domestic box office and 9.1% of international ticket sales in the record-setting premiere week. Looking beyond the financial impact of this single movie, the flourishing Marvel title points to robust big-screen results in the long run. The immersive Imax experience is not easy to replicate in your living room, which gives this company an edge over the movie theater industry as a whole. That being said, Imax shares are still trading 34% below the 52-week highs that were set in early March.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.



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