The coronavirus pandemic and the associated lockdowns along with the social distancing norms have come as a hammer blow for a range of businesses. One of the businesses to have suffered considerably due to those factors was the movie theatre business and naturally, that put movie theatre operator AMC Entertainment Holdings Inc (NYSE:AMC) is massive difficulties.
The stock had tanked as well since movie theatres had been shut down in order to prevent the spread of the pandemic. However, the AMC stock got a major boost on Thursday after the company announced that in excess of 100 of its movie theatres are scheduled for a grand reopening on August 20. It is a major development for the company and as soon as the news broke, investors piled on to the stock.
The AMC stock rallied by as much as 10.3% on Thursday after the news broke and in such a situation, it could be worthwhile for investors to perhaps take a closer look at the stock. The excitement among investors is understandable in light of the latest announcement but it is also important to look a bit deeper and figure out if the gains are justified or not.
The company announced that more than 100 theatres are going to be reopened for business next week. However, there is more. AMC also stated that in excess of 300 more theatres are going to be reopened over the course of the following two weeks.
Hence, as much as 66% out of the company’s 600 total theatres are going to be open for business by September 3 when the hugely anticipated Warner Brothers’ movie Tenet is released. While the reopening of theatres is a major boost for the company, the success of the whole exercise is going to depend on footfalls. It remains to be seen if customers are willing to actually come into the theatres and spend their money.
The company has decided to run a promotion in order to lure back customers and starting August 20, it is going to offer its tickets to customers at the rate of $0.15 each. That was apparently the price of tickets back in 1920. In the days before the release of Tenet, AMC is going to offer customers the option of watching recent hits like Ghostbusters, Black Panther and The Empire Strikes Back among others. The company will be charging $5 for admission and $5 for refreshments.
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