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Shares of embattled theatre chain operator AMC Entertainment are ticking in the green again following its announcement of debt restructuring. However, these fleeting gains do little to impact the bearish outlook for AMC stock, which is overshadowed by its declining underlying business. AMC stock remains as precarious as ever, potentially sending its shareholders into dizzying headaches. Therefore, AMC is a no-brainer stock to sell, which will continue to erode shareholder value for the foreseeable future.
In May, after being off the radar for almost three years, Keith Gill, known as Roaring Kitty, triumphantly returned to X (formerly Twitter). Unsurprisingly, his return led to an explosive rally in meme stocks like AMC. AMC stock, in particular, surged over 110% from May 13 to May 14, only to slip back into the red shortly afterward.
Hence, AMC’s meme status has lost its edge, which is arguably the most noteworthy event for the business in the past few years. It now finds itself navigating a testing business environment with a massive debt load that could push it to insolvency.
AMC’s Debt Restructuring: A Desperate Lifeline?
AMC recently unveiled its plans to restructure roughly $4.5 billion of its debt load as it looks to extend maturities on more than 50% of its existing liabilities. In doing so, it will issue $1.2 billion in new-term loans and $414 million in exchangeable notes. The goal is to push back on the looming $2.8 billion debt maturities in 2026.
To give the devil its due, AMC has done well in cashing in on the meme stock frenzy and managing its debt load over the past few years. Its net debt pay-down yield, which measures the debts it has paid down in relation to its market capitalization, stands at an impressive 57%. Moreover, its outstanding share count has risen by 72% over the past three years. Just this May, it raised $250 million in new equity to pounce on the retail trading mania.
However, surprisingly, despite its massive debt, that’s not the primary issue impacting AMC’s business. It’s actually the stagnation in top-and-bottom-line growth over the past several years that’s truly troubling. In fact, the 3-year change in its long-term debt is at a negative 17%. In contrast, its revenue growth per share over the same period is at a negative 18.4%. Also, its median 10-year net margin is at a deplorable negative 5.4%.
Streaming Rivals and Box Office Blues
The entertainment world has undergone a seismic change over the past few years. Gone are the days of packed cinema halls, with Netflix and chill reigning supreme. Hence, with such dynamics in play, AMC finds itself at a crossroads and at the mercy of big-ticket films to drive its business. To complicate things further, these potential box office blowouts are few and far between.
Hollywood is off to a challenging start to the year, reeling from the effects of strikes, which significantly impacted production schedules and delayed movie releases. Consequently, we have an uneven slate of films with disappointing box office performances. We recently had the lowest Memorial Day Weekend sales in decades. Additionally, as of May, Year-to-date box office sales are trailing 2023 numbers by 23.6%.
If that wasn’t enough, you have the streaming phenomenon, which continues to nibble away at what’s left of AMC’s share in entertainment. According to a recent Nielson report, streaming accounts for 40.3% of TV screen time in June, leaving other entertainment forms in the dust.
The reality is that viewers are flooded with choices, and billions of dollars are being poured into original programming. On the other hand, AMC relies on major studio releases that haven’t been up to snuff lately. Streaming is here to stay and represents a colossal change in content consumption, leaving AMC’s stockholders in a major spot of bother.
The Final Word on AMC Stock
AMC’s short-term gains from debt restructuring announcements and meme stock rallies have nothing to do with its fundamental challenges. It’s up against formidable headwinds in its niche, with an industry transformed by streaming services, diverting audiences from traditional cinema. Also, AMC is burdened with an enormous debt load, with its business dependent on a few big-ticket releases. Hence, it’s unsurprising that AMC stock is trading 91% behind its 52-week high price of $54.97, with more downside expected.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.
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Thursday, July 25, 2024
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features a real-time scorecard of the Q2 earnings season and updated analyst reports on 16 major stocks, including Netflix , Wells Fargo and Comcast , as well a micro-cap stock AXIL Brands, Inc. . The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.
These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
Q2 Earnings Season Scorecard
Including all of this morning's reports, we now have Q2 results from 181 S&P 500 members or 36.2% of the index's total membership. Total earnings for these companies are up +6.3% from the same period last year on +4.9% higher revenues, with 79.6% beating EPS estimates and 58% beating revenue estimates.
The +6.3% earnings growth in Q2 for this group of companies compares to +8.3% for these companies in 2024 Q1, +2.1% in 2023 Q4, and +4.2% in 2023 Q3. On the revenues side, trhe +4.9% revenue growth for these 181 index members compares to +4.4% in Q1, +3.4% in 2023 Q4 and +3.9% in Q3.
On the beats side, the 79.6% EPS beats percentage compares to the 20-quarter of 79.9% for this group of 181 index members while the 58% revenue beats percentage compares to 70.1% average over the preceding 20-quarter average.
Looking at Q2 as a whole, cobining the actuals that have come out with estimates for the still-to-come companies, total earnings are expected to be up +9.6% from the same peirod last year on +5.1% higher revenues.
Today's Featured Analyst Reports
Netflix shares have outperformed the Zacks Broadcast Radio and Television industry over the year-to-date period (+28.9% vs. +14.8%). The company added 8.05 million paid subscribers globally in second-quarter 2024, with a rise of 1% in average revenue per subscription. The company attributed the robust top-line growth to its paid subscription-sharing offering (part of its password-sharing crackdown), recent price changes and the strength of its business in general.
Netflix is expected to continue dominating the streaming space, courtesy of its original and diversified content portfolio, which is attributable to heavy investments in the production and distribution of localized and foreign-language content.
However, stiff competition in the streaming space from the likes of Apple, Amazon Prime Video, Disney+, Peacock and Paramount+ is a headwind. The company's leveraged balance sheet and a higher streaming obligation are concerns.
(You can read the full research report on Netflix here >>>)
Shares of Wells Fargo have gained +0.6% over the past three months against the Zacks Banks - Major Regional industry’s gain of +7.7%. The company’s second-quarter results reflected lower loan & deposit balances. The company’s loan growth is expected to remain limited, as the asset cap remains in place until it complies fully with regulators’ demands regarding operational risk management.
Similarly, lower originations because of high rates will continue to affect mortgage banking income. However, its progress on efficiency initiatives, such as branch and footprint reduction, will continue to support expense reduction and drive the bottom-line growth.
A decent deposit balance is likely to keep supporting its financials, driven by the strength in the Consumer Banking and Lending segment. With a strong capital position and decent liquid profile, the capital-distribution activities seem sustainable.
(You can read the full research report on Wells Fargo here >>>)
Comcast shares have declined -10.4% over the year-to-date period against the Zacks Cable Television industry’s decline of -15.7%. The company persistently suffers from video-subscriber attrition due to cord-cutting. Moreover, broadband prospects are suffering from increased competition from fixed wireless and fiber businesses. Additionally, a leveraged balance sheet is a major concern.
Nevertheless, Comcast’s second-quarter earnings reflect continued momentum in domestic wireless subscribers and Peacock, offset by a declining broadband subscriber base. The company’s plan to transition to DOCSIS 4.0 is noteworthy. The technology will expand it much faster and at a lower cost compared with its competitors.
Decreasing programming and production costs bode well for Comcast’s profitability. Its streaming service, Peacock, is a key catalyst in driving broadband sales. Strong free cash flow generation ability is noteworthy.
(You can read the full research report on Comcast here >>>)
Shares of AXIL Brands have underperformed the Zacks Consumer Products - Staples industry over the past year (-46.1% vs. -13.3%). This microcap company with market capitalization of $38.04 million is witnessing rising operating expenses and declining gross profit margins signal profitability challenges. Inventory management issues and high customer concentration risks, with three customers accounting for 94% of net sales, add to the concerns. Increased accounts payable and reduced cash flow from operating activities highlight cash flow volatility.
Nevertheless, AXIL is expanding globally, diversifying revenue streams across the United States, Canada, the EU and Asia. Strategic initiatives, such as the NASCAR-branded hearing protection product deal with Racing Electronics and a distribution agreement with Kinsey’s, boost market penetration.
The strategic share repurchases in March 2024, reducing outstanding shares by 55%, enhance shareholder value. Third-quarter fiscal 2024 revenue growth of 14.4% shows effective sales strategies and business expansion.
(You can read the full research report on AXIL Brands here >>>)
Other noteworthy reports we are featuring today include Chevron Corporation , Eaton Corporation plc and HCA Healthcare, Inc. .
Director of Research
Sheraz Mian
Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
Today's Must Read
Netflix Rides on Subscriber Growth, Original Content
Cost Control Aids Wells Fargo Amid Lower Loan Growth
Wireless Subscriber Gain Drives Comcast's Prospects
Featured Reports
Chevron to Gain Guyana Foothold with Hess Buy
The Zacks analyst believes Chevron's Hess buy will give it access to high-quality assets in Guyana and the Bakken Formation in North Dakota but is worried about the weak reserve replacement ratio.
Wide Market Reach, New Product Development Aid Eaton
Per the Zacks analyst Eaton's operations in 175 countries across the world and development of new products through ongoing R&D investments will continue to drive demand and boost profitability.
Solid Adoption of ESG Solution Aids MSCI's Progress
Per the Zacks analyst, MSCI is benefiting from strong demand for custom and factor index modules and the increasing adoption of the ESG and Climate solutions into the investment process.
New Order Growth & Lot acquisitions Aid NVR, High Costs Ail
Per the Zacks analyst, NVR benefits from growth in new orders and a higher average selling price. Also, focus on solid lot acquisition strategy bodes well. However, high costs are a concern.
Quest Diagnostics' Base Revenues Solid, High Debt Ails
Per the Zacks analyst, Quest Diagnostics' base business gains from new customers, improved test mix with advanced diagnostics and ongoing healthcare utilization. Yet, mounting debt poses concern.
Globe Life Continues to Gain From Solid American Income
Per the Zacks analyst, Globe Life is set to grow on solid American Income distribution channel that remains the largest contributor of premium and underwriting margin, which boost revenue growth.
Rezdiffra Approval Boosts Madrigal , Narrow Pipeline a Woe
Per the Zacks Analyst, the approval of Rezdiffra for NASH is a huge boost for Madrigal ensuring a regular income stream upon launch. However, the lack of a deep pipeline is a woe.
New Upgrades
Improving Admissions, Acquisitions Aid HCA Healthcare
Per the Zacks analyst, HCA Healthcare's growing revenues, driven by increasing admissions, have led to significant growth. Strategic acquisitions have helped it expand and remain a driving factor.
Solid Comps Run to Fuel Urban Outfitters' Top Line
Per the Zacks analyst, Urban Outfitters commitment to improve comps, invest in direct-to-consumer business and expand e-commerce sales bode well. Comps rose 4.6% during first- quarter fiscal 2025.
Iridium's Performance Gains from Higher Subscribers
Per the Zacks analyst, Iridium is gaining from higher subscribers, driven by the growing adoption of its services in various sectors. Rising deal wins, especially from the U.S. government are a plus.
New Downgrades
Allegiant Grapples With Rising Expenses, High Debt
The Zacks Analyst is worried about the fact that rising operating expenses are likely to keep ALGT's bottom line under pressure. A debt-laden balance sheet is another concern.
Excess Inventory & Declining Backlog Ail Winnebago
Per the Zacks analyst, Winnebago's excess inventory in the motorhome RV and marine categories may result in pricing pressures. Diminishing order backlog is also concerning.
Lower Prices, High Input Costs Ail Steel Dynamics
Per the Zacks analyst, the company faces margin headwinds from slumping steel prices partly due to a slowdown in end-market demand. It is also exposed to headwinds from elevated steel input costs.
Zacks Investment Research
Former NFL quarterback Colin Kaepernick is turning his attention to helping creators in the artificial intelligence sector.
What Happened: The former San Francisco 49ers quarterback is launching Lumi Story AI, an artificial intelligence company backed by Seven Seven Six, the venture capital firm co-founded by Reddit co-founder Alexis Ohanian.
The company has received $4 million in funding, with Seven Seven Six leading the seed funding.
According to the Wall Street Journal, Lumi Story AI can help writers create illustrations and graphics for their words, and artists create words to go along with their artwork.
"It allows us to help fill the skill gaps of creators," Kaepernick said. "We are now building in that direction to try to open that up and democratize storytelling."
The former National Football League player said creators have told him that high production costs, long timelines and lack of expertise in distribution and marketing are often roadblocks to make their work stand out and accomplish goals.
"We look at it as AI should be empowering and enhancing creators," Kaepernick added.
In an interview with Seven Seven Six, Kaepernick said Lumi helps creators come up with ideas and character creation for a small monthly fee.
"It's a way for people to be able to build ideas, test ideas and do it much more quickly."
Kaepernick said the platform aims to get creators around long production processes and make sure they see the long-term benefits of their creation.
"We want them to be able to be financially stable."
Seven Seven Six shared in a thread that Lumi understands the challenges and opportunities of AI and building "a better way for all."
"Creators want control of their work, but they also enjoy using AI. For many creators, AI is a vital assistant. But they fear that the large corporations who currently make AI tools will exploit them. Lumi is centering authentic storytelling for a truly people-powered AI," Seven Seven Six tweeted.
The thread said Lumi helps creators create and not have to worry about logistics or administrative duties.
A beta version of Lumi Story AI launched on Wednesday targeting the comic book sector with plans to expand to more offerings down the road. Plans also call for Lumi Story AI to help creators make and sell merchandise based off of their work.
Read Also: Reddit Co-Founder Alexis Ohanian Prints Mean Tweets And Screenshots: How He Uses Them As Motivation
Why It's Important: Kaepernick has not played in the NFL since 2016 as lower performance and concerns over his protests of racial injustice led to teams not wanting to sign the quarterback who took the 49ers to a Super Bowl.
Since his time in the NFL, Kaepernick has launched Kaepernick Publishing and a youth education initiative known as Know Your Rights Camp.
Kaepernick also co-created a six-episode series for Netflix Inc with director Ava DuVernay. "Colin in Black & White" gave viewers and in depth look at Kaepernick's teenager years and how his experiences led to becoming an activist later in life.
The former NFL quarterback was also part of the team that launched an ESG-focused SPAC that later liquidated after having a deal fall apart.
Kaepernick also continues to train in case an NFL team calls him for an opportunity.
Read Next:
Image: Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
This was a fascinating week featuring political shifts, increased market volatility, and a week-long drop in the stock prices of the mega-cap tech leaders that have been supporting the equity market indexes the past couple of years. This week, we’re focused on higher retail sales and wondering if anything will slow the consumer. Higher jobless claims make people think the Fed is almost 100% certain to cut rates by September. China is trying to keep its banks from imploding. Treasury Secretary, Yellen, is shortening the duration of the government bond market leading to larger auctions with less comparative demand. (Don’t worry – we’ll explain.) Finally, I address some critics who insist that all would be fine if we could just get people to pay more in taxes. As usual, DKI Interns, Alex Petrou and Andrew Brown, come through with their usual high-quality work and excellent analysis.
This week, we’ll address the following topics:
Retail sales stronger than expected. Rate cut expectations still increased?!
Jobless claims come in high. Rate cut expectations increased.
The Magnificent Seven’s Awful Terrible Week.
China throws liquidity at its banking sector.
Treasury auctions getting larger and weaker.
Tax receipts vs government spending: Which one is out of line?
Ready for another week of waiting for rate cuts (or Godot)? Let’s dive in:
Strong Retail Sales and Possible Rate Cuts:
Recent adjustments to the GDPNow model, which estimates U.S. economic growth in real-time, indicate a more robust second quarter for 2024 than initially anticipated. The nowcast has increased from 2.0 percent to 2.5 percent, fueled by stronger than expected retail sales and a rise in personal consumption expenditures from 1.6 percent to 2.1 percent. Real final sales also improved, climbing from 1.3 percent to 1.7 percent.
Graph from https://mishtalk.com/economics/better-than-expected-retail-sales-boosts-gdpnow-nowcast/
DKI Takeaway: This marker of economic strength complicates the case for a Federal Reserve rate cut. Despite the market pricing in a 98.1 percent probability of a rate cut in September, up from 67 percent a month ago, this optimism may be misplaced. The Fed typically responds to weaker economic conditions or subdued inflation, neither of which align with the current robust retail sales data and GDP projections. With consumer spending proving resilient, the Fed may find it prudent to maintain current rates to avoid fueling inflation further. Analysts projecting a high probability of a rate cut might also be underestimating the Fed's cautious stance. The central bank is likely to weigh the solid economic data heavily against market expectations. Considering these indicators, it appears more plausible that the Fed will hold off on rate cuts (or at least more plausible than the market thinks). DKI maintains its position that the Fed, and specifically Chair Jerome Powell, are more concerned about reigniting inflation by cutting rates too soon. Additionally, cutting rates before an election could be perceived as politically motivated, a scenario the Fed is keen to avoid in order to maintain the perception of political neutrality.
Jobless Claims Come in High:
For the week ending July 13th, initial jobless claims in the United States surged to 243,000, up from 223,000 the previous week. This increase of 20,000 claims exceeded the original estimate of 229,000 by 14,000. Several factors may have contributed to this unexpected rise. One significant factor was Hurricane Beryl, which impacted Houston last week, potentially leading to a temporary increase in jobless claims due to disruptions in businesses and employment. Additionally, the end of a U.S. holiday period can sometimes lead to fluctuations in jobless claims as seasonal employment adjusts. Despite the caveats, this is a sign of a cooling labor market.
This isn’t even close to awful, but the recent trend hasn’t been great.
DKI Takeaway: This week’s spike in claims is significant as the unemployment rate continues its gradual ascent to the highest level since January 2022 (4.1%). With the labor market showing signs of cooling, there is increasing pressure for the Federal Reserve to consider pivoting towards rate cuts. Many are hopeful that a rise in unemployment might prompt such a move by Chair Powell. However, the Federal Reserve must navigate its dual mandate carefully. Although inflation is decreasing, it has yet to reach the 2% target, and unemployment is on the rise. Ultimately, the Fed will need to prioritize one objective over the other, with inflation remaining the biggest threat lurking in our economy.
The Magnificent Seven’s Awful Terrible Week:
After a week of economic uncertainty, tech stocks experienced a sharp decline. A major factor was former President Trump’s statement that the U.S. would not defend Taiwan if attacked by China, and suggesting that Taiwan should pay the U.S. for its defense. This caused a sell-off in chip stocks such as Nvidia , Taiwan Semiconductor , and Advanced Micro Devices . Microsoft also faced challenges due to a cybersecurity attack, which led to a drop in its stock price. Additionally, Netflix had a good quarter, but guided to 3Q revenue of $9.73 billion which was below the consensus estimate of $9.83 billion.
A bad week with NVDA and META down more than 10% from the prior week.
DKI Takeaway: A widespread tech sell-off has been anticipated for months. Over the past two years, we've witnessed a surge in the mega-cap Magnificent 7, but with the tech sector priced for perfection, it doesn’t take much for these stocks to fall. These companies have become expensive, and as the economy slows down, the tech sector may follow suit. Over the next couple of weeks, earnings reports from several of the Magnificent 7 will provide key indicators of market direction. Additionally, Tesla has reported a 24% drop in car registrations and Apple has seen multiple quarters of declining device sales, reflecting broader economic trends and product competition.
Amid rising deflationary pressures and a contracting property market, China is taking aggressive steps to stabilize its economy. @Peruvian_Bull recently reported on Substack (https://substack.com/home/post/p-146489585) that the People's Bank of China (PBoC) has injected over $100 billion into the banking system, marking the highest liquidity levels since February 2024. This move comes in response to a banking crisis where 40 Chinese banks have collapsed recently. Commercial banks are also facing declining profits with net interest margins dropping to historic lows of 1.73% by September 2023.
Malinvestment has put Chinese banks at risk. Graph by TradingView.
DKI Takeaway: As property investments contracted by 8% in 2023 and transaction volumes fell sharply, the PBoC's aggressive liquidity injection aims to stabilize the system and prevent further economic decline. The substantial liquidity boost underscores the gravity of the current economic situation and the lengths to which Chinese policymakers are going to manage deflationary pressures and support the financial system. @LynAldenContact, in a recent MacroVoices episode (https://open.spotify.com/episode/5U4QfgkraOEe0w1JJi6jBS?si=ac550bf98e074bbf), highlighted ongoing weaknesses in China’s housing market and consumer consumption, despite strong industrial production. She pointed out that these trends echo Japan’s disinflationary period, whereby highly indebted private debt bubbles lead to a rotation from the private sector to the public sector. The years of propping up the housing market is starting to show in a slow-motion unravelling on malinvestment. Referring to both Peruvian Bull and Lyn Alden this ‘intervention’ by the PBoC is not the largest liquidity injection by the Chinese government; however, if these issues persist, it is likely this will not be the end of China’s issues as this indebted system continues to unravel.
A long-standing DKI opinion is that government spending levels are unsustainable and are worsening. The government funds this excess spending through bond issuance, with each auction revealing different dynamics. Since COVID, Treasury Secretary, Janet Yellen, has shifted bond issuances toward the front of the yield curve, moving from long-dated bonds to short-term debt. This trend is concerning, as similar patterns were observed in Zimbabwe before its hyperinflation in the 2000s and more recently in Venezuela. These countries relied on short-term debt to manage immediate cash flow issues, which ultimately exacerbated their economic instability. The risk of this is shorter-term debt needs to be refinanced more frequently which causes the size of government bond auctions to increase.
Graph from Apollo Academy. That’s a big increase, especially for shorter-term bonds.
DKI Takeaway: Each auction tells its own story and Treasury traders measure each auction’s success using key metrics like the bid-to-cover ratio and the auction tail. The bid-to-cover ratio compares the number of bids to the quantity accepted, indicating demand. The auction tail measures the difference between the highest accepted yield and the expected yield, with a large positive tail signaling weaker-than-expected demand. More detail on this subject can be found in an insightful thread by James Lavish @JamesLavish (https://twitter.com/jameslavish/status/1577334009092198400). Looking ahead, U.S. Treasury issuance is expected to reach record levels later this year. Some argue that such trillions of dollars of issuance could be a sign encouraging a cut in the Fed Funds Rate (FFR) by September. However, it's crucial to remember that bond yields are determined by the market, not directly by the FFR. In addition, the market for US Treasuries is deep, but everything has demand limits depending on price.
As part of the 5 Things a couple of weeks ago, we talked about how Fed Chairman, Powell, called out Congressional overspending as unsustainable. The Fed has been trying to slow the economy and reduce inflation through rate hikes. Congress and the White House (aided by the Treasury Department) have been engaging in trillions of dollars of inflation-causing stimulus spending while many in Congress insist that Powell lower the fed funds rate to make the borrowing costs of all that extra debt less expensive. When I pointed out that Powell is correct that Congress is both causing inflation and incurring debts that are unpayable, I got some pushback on Twitter/X. Several thought the real problem was tax cuts that were denying the government the “revenue” it needed to pursue all spending plans regardless of value. Let’s take a look at whether the data supports that.
That’s a big increase in tax collections with a bigger increase in spending.
DKI Takeaway: The growth in the size of government has become exponential. To me, it seems clear that with tax collections of $5 trillion, the government has the means and opportunity to do plenty. As quickly as tax collections have grown, government spending has grown even faster. I understand the concept that taxing the “rich” can be a way to pay for benefits for the poor. However, as the government spends more, that additional stimulus, which is focused on consumption, not investment, is creating inflation. Inflation works fine for the wealthy who can take on fiat-denominated debt to buy hard assets. It’s been terrible for less affluent people who can only save in depreciating dollars and who have been facing increasing budgetary issues due to rising rent along with higher food and fuel prices. While I understand both sides of this argument, I continue to believe we’d all (rich and poor) be better off with a government that is a more modest part of the economy.
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Vice President Kamala Harris has landed key endorsements and donations from the entertainment industry ahead of her likely nomination for president in the 2024 election.
What Happened: Harris gained support and endorsements from key members of Congress in her fight to secure the Democratic Party's nomination for president in the 2024 election.
The vice president is now gaining support from celebrities and entertainment leaders through their words and their wallets.
Walt Disney Co heiress and philanthropist Abigail Disney is one of the latest to back Harris and her endorsement could be an important one.
"I am supporting her with all my heart," Disney told a New York Times reporter.
The filmmaker and philanthropist is planning to make a donation to Harris and plans to host a fundraising event for the vice president, as reported by Variety.
Disney previously said she would no longer donate to the Democratic Party "unless and until" President Joe Biden was replaced in the 2024 election. Disney was a key supporter for Harris being the replacement, saying she could beat Donald Trump.
"If Democrats can find a way to stop quibbling and rallying around her, we can win this election by a lot," Disney previously said.
Disney may not be the biggest donor to the Democratic Party or Harris' campaign, but her name resonates with the entertainment sector and her call to host a fundraising party could be a key for campaign contributions moving forward.
Read Also: ‘The Simpsons’ Does It Again? Could This Animated Show, ‘Veep,’ ‘Barbie’ Foreshadow Kamala Harris Winning 2024 Election
Why It's Important: Disney isn't the only member of the entertainment sector to support and donate to Harris.
The vice president picked up a $7 million donation from Netflix Inc co-founder and Executive Chairman Reed Hastings, via a super PAC. The donation marks the largest single candidate donation by Hastings.
"Congrats to Kamala Harris — now is the time to win," Hastings recently tweeted.
Actor George Clooney made headlines for supporting Biden and then later writing an op-ed for the president to step down. The actor has pledged his support to Harris since Biden stepped down.
"We're all so excited to do whatever we can to support Vice President Harris in her historic quest," Clooney said in a statement shared by Entertainment Weekly.
Similar to Disney, Clooney's support may not be the biggest financially, but comes after calling out the party and for Biden to step aside.
Other celebrities endorsing Harris include Katy Perry, John Legend, Jamie Lee Curtis, Kathy Griffin, Charli XCX, George Takei, Demi Lovato, Cardi B and Sheryl Lee Ralph, according to reports from BBC and Newsweek.
Harris raised a reported $81 million in the first 24 hours after Biden dropped out of the race.
The entertainment sector has been key for support and donations to Biden in recent years. With many turning against or saying they wouldn't donate until the president stepped down, Harris could benefit from Hollywood in the months ahead.
Read Next:
Photo: Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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