AMC stock takes a huge hit as Cinemark is reportedly eyeing its theater locations
The theater giants have been struggling amid the coronavirus pandemic
Cinemark may be trying to move in on AMC Entertainment’s movie theater territory, literally.
AMC’s stock fell almost 18% on Monday, closing at $3.19. Although Cinemark took a bit of a hit as well, it seems to be in better financial shape and may be eyeing property that, for the time being, belongs to AMC.
Both companies rank among the largest theater exhibitors in the U.S. but have been struggling amid the coronavirus pandemic as a combination of wary audiences avoiding the cinema and studios pushing release dates for new movies back into 2021 has caused unprecedented financial strain.
AMC stock dropped another 10% on Tuesday to $2.86, its lowest point since Nov. 6. Cinemark, meanwhile, made up some territory raising 3.5%, though sold off again hours later.
AMC RENTING OUT THEATERS FOR $99 AMID PANDEMIC RECOVERY PLANS
AMC's stock took a dip this week. (AP Photo/Chris Pizzello, File)
Sources for The New York Post say Cinemark and AMC could enter into negotiations that would see the former taking over spots where the latter is having trouble paying rent. Although nothing has been verified, the report from The Post comes after AMC said Friday that it took a high-interest loan from Mudrick Capital Management for $100 million to stay afloat through January. However, in disclosing the loan, AMC noted that it needs at least a $750 million cash injection to keep going through 2021.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| CI | THE CIGNA GROUP | 350.96 | +3.60 | +1.04% |
| CNK | CINEMARK HOLDINGS INC. | 17.22 | -0.15 | -0.86% |
It’s unclear what value any new investors will find in AMC given Warner Bros.' shocking plan to release all of its 2021 lineup on both HBO Max and in theaters simultaneously, further hamstringing theater chains from marketing around new releases in the pandemic.
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With Cinemark’s finances looking slightly better amid a wave of uncertainty, it’s possible it sees now as the time to strike against its competition while simultaneously positioning itself for success in a post-pandemic landscape.