.karaswisher and profgalloway discuss Amazon’s plans to acquire AMC, what office life during the coronavirus might look like, and talk to SRuhle about the state of the economy
Sell the house, sell the theater chain, sell the food-delivery app. Photo: Getty Images The economic downturn created by the pandemic could prove to be a moment of historic conglomeration if massive companies pony up to buy firms that are either experiencing new growth or facing the expiration of an old way of life. No two companies represent that divide better than movie chain AMC Theatres and the food-delivery app Grubhub.
Scott Galloway: Amazon does anything and you can bet that Disney and Time Warner all of a sudden have their pencils out, thinking, Should we be acquiring movie theaters? Galloway: It’s really interesting because everybody thinks about it one way. They think, Okay, Amazon is going to buy movies or produce movies. AT&T or Comcast is going to start skipping theater distribution and go straight to your TV set. It makes sense, right?
Galloway: Whenever I get together with elected officials or I talk to the media, my ideas aren’t that novel. They’ve heard my rap. What I do that usually kind of shock-and-awes them is I talk about proportionality. So AMC went up 56 percent today. It’s got a total market cap of $480 million. An influential brand, right? Amazon is at $1.2 trillion. In an average business day or average trading day Amazon goes up or down $25 billion. So, in sum, Amazon loses or gains 50 AMCs every trading day.
Galloway: It feels like it’s straight out of an economics class. You have two or three really well-funded competitors: there’s DoorDash, there’s Grubhub, and there’s Uber Eats. When you have a consolidation of power on one part of the supply chain and then you have literally hundreds of thousands of suppliers, there’s just so much leverage and power that goes to the consolidators.
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