UPDATED with closing prices. The better-than-expected Christmas-weekend opening of Wonder Woman 1984 is giving most exhibition stocks a welcome boost as the misery of 2020 gives way to hope for a brighter 2021.
Shares in Cinemark, Imax, Marcus Corp. and National CineMedia rose between 3% and 7% apiece after the sequel took in $16.7 million domestically, the best bow by any film during the coronavirus pandemic.
AMC, the world’s largest theater circuit, was a notable exception to the rally. Its stock dropped 5% on ongoing investor concern about its liquidity and a potential bankruptcy filing. At $2.38, AMC shares are at their lowest point since early November, though they are still a notch above their 2020 bottom of $1.95, established in mid-March as Covid-19 shuttered theaters across the Western hemisphere. Regal Cinemas parent Cineworld mustered just a 1% gain on the London Stock Exchange.
Shares in the comparatively better-fortified Cinemark, meanwhile, gained 3% to $16.98.
WarnerMedia has elicited a fierce industry backlash by sending not just WW84 but its entire 2021 slate to streaming service HBO Max at the same time it hits theaters. The company reported healthy viewership on HBO Max over the weekend but has not released any new subscriber data. The economics of releasing major tentpoles without the hundreds of millions of dollars generated by theaters are significantly more challenging than using theaters to drive other revenue opportunities.
Analyst Eric Wold with B Riley predicts Warner Bros will reverse course on its streaming plan, especially if exhibitors balk at the revenue splits proposed by the studio and the films end up with little distribution beyond streaming. In a note to clients today, he called the film a “loss leader” designed to prop up HBO Max. Its box office confirms Wold’s belief that “movie watchers want to become moviegoers.” Despite being able to play in 23% fewer theaters than Warner Bros’ Tenet in September, WW84 far outdid the Christopher Nolan film’s $9 million debut. (Imax locations contributed 7% of domestic grosses and 10% on a global basis, he noted.)
Nearly half of all direct retail subscribers to HBO Max streamed the Wonder Woman sequel, with overall viewership on the service running at triple the level of a non-holiday November period. Still, Wold maintained, “The decision made by HBO Max subscribers to watch “WW84″ at home was more of a decision made for them by local theaters being closed and stay-at-home restrictions as opposed to the preferred way to watch blockbuster films going forward.”
With top markets like New York, LA and San Francisco closed and other major cities facing significant capacity restrictions, Wold said the WW84 opening equates to a $110M-120M bow in a normal marketplace. (The original film opened with $103M in 2017.)
“We believe this helps support the thesis that when consumers are allowed back to theaters with attractive content, they will once again become moviegoers—with the industry having the potential to begin returning to normal in 2022,” the analyst wrote.