AMC Stock Soars on Cuomo’s Announcement Reopening NYC Theaters

AMC Entertainment stock closed 17.7% higher Tuesday, after the theater chain hailed New York Gov. Andrew Cuomo’s (D) decision greenlighting the March 5 reopening of cinemas in New York City. Cuomo’s executive order Monday put theaters in the five boroughs in line with most cinemas elsewhere in the state that were allowed to reopen with limited capacities in late October. Theaters in the city have been shuttered since the first COVID-19 lockdown orders took effect March 22 statewide. Theater restrictions will be uniform statewide, including mandatory masks and preassigned socially distanced seating, said Cuomo. Attendance will be limited to 25% of capacity or 50 people per screen, whichever is smaller, he said. AMC will reopen all 13 of its locations in the city when the restrictions lift March 5, said CEO Adam Aron. S&P at least twice downgraded the stock, warning investors AMC was precariously close to running out of cash amid COVID-19 theater closures and the pullback of major film slates from in-person audiences (see 2101220036). The New York development is a “ray of light” for AMC, Wedbush analyst Michael Pachter wrote investors Tuesday. The move could entice other densely populated areas to reopen and lead to studios maintaining Q2-Q3 film slate release plans, he said. The analyst tempered remarks about pent-up demand saying people may remain reluctant to attend movies until they get inoculated for protection against COVID-19. Pachter stood by his comments Monday (see 2102220052) that he doesn’t expect movie attendance to begin returning to normal before July.