Please ensure Javascript is enabled for purposes of website accessibility

Why AMC, Cinemark, and National CineMedia Stocks Plunged Today

By Joe Tenebruso – Jun 11, 2020 at 2:13PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Coronavirus and movie theaters don’t go well together.

What happened

Movie theater stocks fell on Thursday, as multiple U.S. states and international markets reported rapidly rising COVID-19 case counts.

As of 1:41 p.m. EDT, shares of AMC Entertainment (AMC -1.83%), Cinemark Holdings (CNK -3.51%), and National CineMedia (NCMI -6.27%) were down 13%, 12%, and 11%, respectively.

So what

At least a dozen U.S. states and parts of many other countries are dealing with record numbers of new COVID-19 cases. The situation threatens to force health and government officials to slow reopening plans, which could stifle a much-needed economic recovery that has only just begun.

Empty seats in a movie theater.

Movie theater stocks fell sharply on Thursday, as concerns that their theaters will remain empty mount. Image source: Getty Images.

Fears of becoming infected with the novel coronavirus could also keep people out of movie theaters, many of which are planning to reopen in the coming weeks. AMC Entertainment and other theater chains have warned that if they don't reopen soon, they might not be able to remain in business. However, even if they do open their theaters to patrons, it remains uncertain if enough people will risk getting sick to go to the movies, rather than simply watching shows in the comfort and relative safety of their own home.

Now what 

While companies such as Netflix clearly stand to benefit from a coronavirus-driven acceleration in the stay-at-home trend, movie theaters could be one of the hardest-hit industries during the COVID-19 crisis. That makes AMC Entertainment, Cinemark Holdings, and National CineMedia particularly risky investments during the pandemic.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Netflix. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Cinemark Holdings, Inc. Stock Quote
Cinemark Holdings, Inc.
CNK
$12.11 (-3.51%) $0.44
National CineMedia, Inc. Stock Quote
National CineMedia, Inc.
NCMI
$0.65 (-6.27%) $0.04
AMC Entertainment Holdings, Inc. Stock Quote
AMC Entertainment Holdings, Inc.
AMC
$6.97 (-1.83%) $0.13

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
326%
 
S&P 500 Returns
102%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/01/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.