What happened
Cinemark (CNK +0.98%) tumbled almost 11% today on no company-specific news, but fellow theater operator AMC Entertainment (AMC +0.00%) was down 10% as well.
So what
Movie theater chains had gotten a boost the other day thanks to prospects improving for reopening the economy, though at least one analyst worried that Cinemark would be hurt by its exposure to the Brazilian market.
Image source: Getty Images.
Imperial Capital analyst David Miller lowered his price target on the theater chain to $24 per share (down from $26), believing the worsening situation in the country would lead Cinemark to post worse than the already dour earnings expected.
Now what
Theater chains are going to be volatile. The owner of the Regal Cinema chain Cineworld Group (CNNW.F +0.00%) soared 33% today after it announced its intention to reopen all of its theaters in July, while also securing another $110 million from its lenders and winning a waiver on loan covenants.
Cinemark and AMC are both also tentatively scheduled to reopen their theaters in July, but AMC has said unless it has movies to actually show, it won't do so.
Hollywood has been shut down during the pandemic just like everywhere else, and a lot of studios brought movies that were supposed to release in theaters to their streaming platforms where consumers could rent them. That limits the ability to re-up them to the big screen again, and moviegoers may choose to spend their money elsewhere.
