Shares in AMC Entertainment jumped 9% Monday to close at $6.46, their highest level since late February, the point when COVID-19 started to decimate the global movie theater business.
The leading exhibitor’s stock, which had plunged below $2 in April on mounting fears of bankruptcy, peaked at $6.84 during the trading day Monday. Its closing price was the highest since it hit $6.51 on February 25.
Shares in No. 3 U.S. exhibitor Cinemark gained more than 11% to close at $19.66. The Marcus Corp., which operates a chain of theaters as well as hotels, finished at $18.97, up 7%. Both closing prices were the highest since mid-March. IMAX Corp. and National CineMedia each posted more modest gains Monday.
No specific piece of news appeared to be driving investor sentiment on the exhibition sector, but broader stock indices finished higher across the board. The narrative on Wall Street has been notably upbeat as more states reopen (even hard-hit New York City has begun its return) and the economy gradually starts to emerge from the depths of the pandemic.
AMC will report its delayed first-quarter financial results Tuesday, and executives will discuss the state of their business with Wall Street analysts on a conference call. The company is far from out of the woods, though it announced the reopening of its Odeon theaters in Norway last week, a hopeful sign. AMC put out preliminary quarterly figures last week, indicating up to $2.4 billion in losses.
The company is highly leveraged and has indicated a degree of doubt about its ability to remain a “going concern.” Like its movie theater peers, AMC has faced headwinds including studio consolidation, direct-to-consumer streaming and a changing retail landscape.
Two major credit agencies issued downgrades of AMC’s credit recently, with S&P declaring that the company’s recent debt swap was “tantamount to default.”
Investors will be listening closely to AMC CEO Adam Aron’s commentary Thursday, in particular his outlook for Warner Bros.’ July 17 release of Tenet, which is slated to kick-start a series of studio openings.
Cinemark last week reported its quarterly numbers as well as a multi-phase plan for reopening its circuit starting June 19. CEO Mark Zoradi said he is “optimistic” that Tenet remains on track, though he conceded that the “rhythm” of theatrical moviegoing is unlikely to return until 2022.
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