Shares of AMC Entertainment (NYSE:AMC) are falling 8% in morning trading on Wednesday as continuing worry over rising new cases of COVID-19 weigh on the theater operator.
While AMC has tiptoed along the precipice of bankruptcy during the pandemic, the world's largest theater owner has been gearing up for a reopening of its movie houses in July. A surge in new cases might cause states to clamp down once again.
Florida's governor has threatened businesses with losing their licenses if they continue to operate with a "Dance Party USA" atmosphere; New York's governor said gyms, malls, and theaters won't be allowed to resume business during its fourth phase of reopening; and Texas' governor said "tougher actions" will be necessary if the state's caseload continues to increase.
Even if AMC Entertainment is able to open most of its theaters next month, it will still be in a precarious position. It has committed to operating at only 30% of capacity, and even then it's not certain moviegoers will return right away.
Hollywood has been similarly shut down during the pandemic, so there might not be much content to show as many movies that were scheduled for a theatrical release were shifted to pay-per-view streaming channels. A lot of theaters are counting on the new Christopher Nolan spy flick Tenet to get consumers back in the seats.