Movie Theater Stocks Hammered After Regal Announces Another ‘Temporary Suspension’
Movie theaters are getting hit hard on Monday, with top cinema chains seeing their share prices drop double digits on Wall Street, after Cineworld, the parent company of Regal Cinemas, announced a “temporary suspension” of operations at more than 600 locations in the U.S. and U.K.
Cineworld’s share price nose dived 34.5% within the first hour of trading on Monday morning, hitting 34 cents per share. The chain’s share price had already been struggling since early March, when it was trading at about $1.70 per share, due to the impact COVID-19 has had on the movie industry.
Other theater chains couldn’t escape the wreckage, either. Cinemark’s share price dropped 15.5% on Monday to $8.53 per share, and AMC continued a month-long slide, dropping 10% to $4.18 per share. National CineMedia, which runs ads at movie theaters and online, was also down nearly 10% to $2.54 per share. Imax was relatively unscathed compared to the rest of the theater industry, slumping 2.9% to $10.94 per share.
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Earlier on Monday, Cineworld announced all 543 Regal Cinemas locations in the U.S. as well as 127 movie theaters in the U.K. and Ireland would suspend operations beginning this Thursday.
“As major US. markets, mainly New York, remained closed and without guidance on reopening timing, studios have been reluctant to release their pipeline of new films,” the company said in a statement, adding that 45,000 employees would be affected. “In turn, without these new releases, Cineworld cannot provide customers in both the U.S. and the U.K. — the company’s primary markets — with the breadth of strong commercial films necessary for them to consider coming back to theatres against the backdrop of COVID-19.”
The announcement, first teased on Saturday, was triggered by MGM and Universal’s decision on Friday to postpone the release of the new James Bond film, “No Time to Die,” from November 20 to April 2021. The Disney/Pixar film “Soul” now stands as the sole remaining major release in November and is expected to move as well.
“We are like a grocery shop that doesn’t have vegetables, fruit, meat,” Cineworld CEO Mooky Greidinger told the Wall Street Journal. “We cannot operate for a long time without a product.”
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