Movie theater stocks got a jolt of life late Monday after New York’s governor said chains in New York City could reopen next week with Covid-related restrictions.
It was the news some beleaguered investors were waiting to hear. AMC Entertainment Holdings (ticker: AMC) shares shot up 14.9% in late afternoon trading, and rose another 9.6% in after-hours trading.
CEO Adam Aron said in a statement that Gov. Andrew Cuomo’s announcement “is another important step towards restoring the health of the movie theatre industry and of our company.”
AMC is going to reopen its 13 locations in the city on March 5. Capacity is limited to 25%, with no more than 50 people per screen.
While able to open locations across the country, AMC and other theater operators have not been permitted to operate in big cities like New York and Los Angeles because of public health restrictions. And without big blockbuster audiences, movie studios have turned to streaming new releases for at-home audiences.
Reopening New York City seems like a new chapter for theaters. AMC has scrambled in the last few months to shore up its cash position so it could ride out the pandemic. AMC shares also got caught up in a trading frenzy by retail investors egging each other on through a Reddit forum to trade stocks using the Robinhood app.
AMC is still down 12% over a year compared to a 16% one-year gain for the S&P 500. IMAX is up 21% over the last year, while Cinemark is down 20%.
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