The stock of AMC Entertainment (NYSE:AMC) jumped 12.5% higher in morning trading Tuesday as the prospect of more states allowing businesses to open boosted prospects that the movie theater operator would be able to reopen, too.
It was just two weeks ago that it looked as if the COVID-19 pandemic would push AMC into bankruptcy, as forced theater closures shut off revenue to the world's biggest cinema operator. The company also slashed its dividend, and executives all took pay cuts to help conserve cash.
But AMC was able to raise $500 million in a new debt offering that pushed back the threat of going bankrupt while its largest shareholder, Dalian Wanda Group, maintained it was never a possibility to begin with.
Investors should still be wary, even if AMC is able to open many of its theaters sooner than the mid-June date it had been eyeing.
The movie industry itself has been seriously hurt by the pandemic, and numerous studios have moved films slated for theatrical release to various streaming sites for people to watch while locked down. While several big films from studios like Disney were simply pulled until the crisis resolves itself, Hollywood is still facing a lost summer when many blockbusters typically air.
Some moviegoers may be better than none, but it still suggests AMC Entertainment is facing a rough year.