AMC’s shares rise after New York City says theaters may reopen

Text size

Theatrical shares came to life on Monday, after the New York governor said New York City networks could reopen next week with Covid-related restrictions.

It was the news that some harassed investors expected to hear.

AMC Entertainment Holdings

(ticker: AMC) the shares rose 14.9% in the late afternoon session and rose 9.6% more in the session after hours.

CEO Adam Aron said in a statement that Governor Andrew Cuomo’s announcement “is another important step in restoring the health of the film industry and our company”.

AMC will reopen its 13 units in the city on March 5. Capacity is limited to 25%, with a maximum of 50 people per screen.

Although they may open locations across the country, AMC and other theater operators were not allowed to operate in major cities such as New York and Los Angeles because of public health restrictions. And without big successful audiences, the movie studios started to transmit new releases to the domestic audience.

The reopening of New York looks like a new chapter for cinemas. AMC has been struggling in recent months to sustain its cash position so it can face the pandemic. AMC’s shares were also caught up in a trading frenzy by retail investors urging each other through a Reddit forum to trade shares using the Robinhood app.

IMAX

(IMAX) shares also jumped 5.6% on Monday, to a new 52-week high, and advanced another 0.9% after closing.

Cinemark Holdings

(CNK) shares rose 6% during the day and 2.5% after closing.

AMC is still 12% below a year compared to a 16% year-over-year gain for the S&P 500. IMAX rose 21% last year, while Cinemark fell 20%.

Write to liz.moyer@barrons.com