AMC movie theatre closing(s) due to the coronavirus COVID-19 pandemic in New York City.
Bill Tompkins | Michael Ochs Archives | Getty Images
Shares of movie theater owner AMC Entertainment fell 10% in morning trading after its biggest rival decided to close its theaters in response to disappointing box office results and more postponed blockbusters.
Cineworld, which owns Regal Cinema, will close its U.K. and U.S. theaters this week. CEO Mooky Greidinger told Sky News that the closures could last more than two months.
The stoppage follows the Friday announcement that “No Time to Die,” the newest James Bond flick, will be pushed to an April 2021 release date. Cases in the U.S. have spiked, and the United Kingdom is seeing a resurgence as well.
In the U.K., Oden cinema chain, which is backed by AMC, is shuttering a quarter of its locations during the week and only operating those theaters on the weekends.
Warner Brothers’ “Tenet” faltered at the domestic box office, while other studios have chosen to move their big movies to video on demand or streaming services in the U.S. Variety reported Saturday that there are rumblings that Disney’s “Soul,” produced by its Pixar animation studio, could be moved to its streaming service, Disney+.
On the heels of the news, Loop Capital Markets revised its estimates for the domestic box office. Analyst Alan Gould wrote in note Monday that ticket sales are expected to plunge 85% in the fourth quarter, a much steeper decline that its prior forecast of sales down just 25%. The third-quarter box office is expected to decline by an additional 10%, Gould said.
“We also question if the weakness will bleed into 2021,” he wrote.
On Friday, S&P Global Ratings lowered its issuer credit rating on AMC from CCC+ to CCC-, saying that the company’s cash burn could accelerate as it reopens venues. The ratings agency said that the company could run out of liquidity in the next six months unless it raises additional capital or movie attendance levels substantially improve.
AMC’s stock, which has a market value of $460 million, has plunged 41% so far this year.