AMC Theaters got a welcome bit of reprieve with a serious stock boost this week, following the re-opening of New York's theaters. After several weeks of contention between governor Andrew Cuomo and theater owners, the governor has officially given the go-ahead for theaters to re-open at limited capacity. Even with this caveat, the move has been a massive boon for the industry, with AMC in particular reporting a 22% rise in stock price as a direct result.
After Cuomo announced plans to re-open theaters, AMC declared its intentions to have as many locations as possible open up again. The only exception was New York City itself, which remains under strict quarantine rules. By the end of the month AMC hopes to have 530 of its 600 locations up and running in at least some capacity. The surge in value comes after the company has been steadily increasing its ability to operate normally across the country.
This has been good news for AMC in particular, which has been struggling heavily under both the weight of the pandemic and its already problematic financial situation. The company has not only re-organized recently to avoid bankruptcy, but admitted in a statement that they could run out their cash reserves by early 2021. Adam Aron, CEO of AMC said in a statement that “The reopening of movie theatres around the country is essential to the theatrical industry and the entire entertainment ecosystem.” It is also likely essential to keeping the company afloat, as it looks to adapt to the changing market it currently finds itself in.
While the theaters in New York will only be operating at 25% capacity for now, this is still a hugely important milestone for the recovery of the industry. Aron said as much in the rest of his statement, which continues: “It has become clear that movie studios are not willing to release blockbuster product until key major markets are open. Therefore, it is a monumental step in the right direction for our entire industry that theatres are starting to reopen across the state of New York.” With any luck, theaters will be able to operate safely and help kickstart the recovery of an industry in desperate need of assistance.
Source: The Wrap