Movie theater stocks like AMC and Cinemark slumped last spring and haven’t recovered, thanks to a historically bad summer movie season, the rise of streaming services and even dying shopping malls, which have reduced foot traffic. Among those hit by the sell-off was Imax, the company responsible for giant screen movies.
But Imax isn’t a theater chain—it is a theater technology firm that makes money by leasing its equipment and taking a share of box office revenue from movies mastered on its system. And unlike other theater chains, it is a global business, with two-thirds of its revenue coming from outside the U.S. Yet investors are lumping in Imax with theater chains that are predominantly U.S. businesses. That might be a mistake.