3 charts for you today:
The latest data from Box Office Mojo reveals that cinemas across the United States are taking between $10m and $15m in weekly admissions revenue in 2021. Last year in January they were averaging closer to $200m a week.
Even in "normal" times, running a large cinema chain was an extremely difficult prospect. We've visualised the latest fiscal year from AMC Entertainment, the largest cinema chain in the country, which reveals that AMC made just a 2% operating profit margin in 2019. That sliver of operating profit is then completely wiped out by the repayments that AMC has to make on its debt — meaning that in 2019 AMC actually lost $149m. And that was at least a "normal" year for cinema more generally.
So given everything that's happened to the movie-going industry it's remarkable that AMC Cinemas has managed to stay afloat. In January AMC raised almost $1bn of investment — an injection of capital that should help the company limp on for another six months. The fact that AMC shares have been caught up in the recent retail rally gave management a chance, if able to act quickly, to perhaps strengthen the company's balance sheet even further.
Popcorn = profit
Although AMC might be in poor financial health overall, its 2019 results reveal just how much cinemas are fleecing you on that popcorn + drink deal. In 2019 they scooped up more than $1.7bn in food & beverage sales, costing them just $279m to do so. That's a delicious 84% gross profit margin — and it's still not enough to keep the business sustainable.
According to the latest data there were more than 250,000 new apprentices in the US in 2019, marking the highest number in more than a decade. The resurgence of apprenticeships is interesting in the context of the current economic crisis, which has generally been hardest on younger workers.
Washington-based think tank Brookings believes that apprenticeships could be a powerful tool in the government's economic response — and they are impressively non-partisan with 83% of Americans reportedly supportive of more government funding for apprenticeships.
Learnin' and earnin'
The combination of on-the-job training and classroom learning (learn and earn) has long been applied in the construction industry. Indeed, almost 70% of all active apprentices in the US in 2019 were in the construction sector. However, apprenticeships are slowly finding traction in other industries too and just 3 weeks ago a UK start-up, which helps organizations to develop apprenticeship schemes, raised $44m of VC funding to help expand into the US.
The biggest piece of the puzzle for apprenticeships to continue to grow is the government, and there is good news. At the end of last year the US House of Representatives passed the National Apprenticeship Act of 2020. If approved the proposed bill could grant an additional $3.89 billion in funding for apprenticeships over five years.
A reputation can take 20 years to build — and 5 minutes to ruin. That quote from legendary investor Warren Buffett would probably strike a nerve at the headquarters of trading platform Robinhood at the moment, as users continue to complain about the app briefly restricting buying on a few key shares — including GameStop. In recent days those complaints have been flooding the App Stores, with thousands of negative reviews posted in the last few days alone.
Robinhood's reputation may not be 20 years-old, but since its founding back in 2013 its mission statement: "to democratize finance for all [with a belief] that everyone should have access to the financial markets" has certainly lost some credibility after restricting buying only on certain stocks.
Robinhood's CEO, Vlad Tenev, has reported that its equities clearing house called him at 3:30 am last week, asking Robinhood to put up $3bn of capital. That forced Robinhood to do its second quick whip round from investors, raising another $2.4bn from investors on Monday — on top of the $1bn they had raised the previous week.
T+2?
Robinhood has since relaxed some of the restrictions on certain stocks — now allowing retail investors to buy up to 100 GameStop shares, up from a previous limit of 20. The CEO has also written a blog post outlining why he believes the real culprit of this entire saga is the US two-day trade settlement period, known as T+2, which means that brokers like Robinhood have to meet deposit requirements, tying up their capital on behalf of their investors, until the trades actually settle two days later.
Whether Robinhood could have managed things differently is hard to know, but for Robinhood's brand it almost doesn't matter — the damage appears to be done.
1) Israel, which has been leading the vaccine race globally, has released an optimistic first set of results on the effectiveness of its vaccination effort. The results show that 317 out of more than 715,000 people became infected a week after becoming fully vaccinated — a mere 0.04%.
2) Lots of news from Amazon this week. They did $100bn of revenue in a quarter. Bezos is stepping aside (kind of) and they unveiled the design for their new HQ which you can judge for yourself.
3) Mozilla has released its latest Internet Health Report which includes 35 slides packed with data on the state of the internet around the world. One fact we didn't know: in 2019 there was at least one internet shutdown in progress every day across 33 countries.
4) Captain Sir Tom Moore, the 100-year-old British man who raised more than £33m ($45m) for NHS charities, has died after contracting COVID-19.
5) Tesla is recalling 135,000 vehicles because the large central touchscreens can fail.
