AMC Entertainment Surges on California Theater Reopening Plans

AMC Entertainment says it will have theaters in all of LA County, and most of the state of California, open by the end of the week.
Author:
Publish date:

AMC Entertainment  (AMC) - Get Report shares surged Monday after the world's biggest movie theatre chain detailed plans to re-open flagship cinemas in Los Angeles, and other California cities, over the coming week.

The group said AMC Burbank 16 and AMC Century City 15 will start showing movies as of Monday, and expects all of its 23 remaining theatres in Los Angeles county to be up-and-running by Friday, along with locations in 56 different cities around the state.

“The reopening of movie theatres in Los Angeles County and throughout California is a momentous occasion for AMC Theatres, for our guests, for our associates, for our studio partners, and for the entire theatrical exhibition industry," said CEO Adam Aron. "To put the magnitude of Los Angeles reopening in perspective, as a movie market, the L.A. DMA is about double the size of the New York City market, which just finished last weekend as the No. 1 DMA in our circuit for box office.” 

“As we have done at more than 525 locations around the country, AMC will reopen with the highest devotion to the health and safety of our guests and associates through our AMC Safe & Clean policies and protocols," he added. "These include social distancing & automatic seat blocking in each auditorium, mandatory mask wearing, and upgraded air filtration with MERV-13 air filters, as well as many other important health, sanitization and cleanliness efforts.”

AMC shares were marked 23.2% higher in late-morning trading Monday to change hands at $13.76 each, extending their six-month gain to around 150%.

AMC's re-opening moves mirror those from gaming group MGM Resorts International  (MGM) - Get Report, whose shares hit a 13-year high earlier Monday following an upgrade from Jefferies linked to COVID recovery hopes.

Airline shares were also on the rise, Monday, as well, following TSA data from Sunday showing the largest number of daily passenger screenings at domestic airports in more than a year and bullish forecasts from carriers such as Delta Air Lines  (DAL) - Get Report, United Airlines  (UAL) - Get Report and American Airlines  (AAL) - Get Report.

Last week, AMC posted a narrower-than-expected fourth quarter loss of $328 million -- and $4.6 billion for the year -- but noted that the nation's accelerating vaccination rate, which topped 100 million over the weekend, will boost AMC attendance and bolster its top and bottom lines.

The group is also planning to capitalize on its recent 'Reddit Rally', which has lifted its stock nearly five-fold since late January, to issue another 500 million shares in order to pay down debt or slow its cash burn rate.