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Why Cinemark Holdings Is Jumping 11% Today

By Rich Duprey – Jul 1, 2020 at 10:40AM

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Theater operators are counting on Hollywood to deliver blockbusters and bring moviegoers back.

What happened

Shares of Cinemark Holdings (CNK 6.99%) jumped over 11% in morning trading a day after the company said it was pushing its movie theater reopening to July 24 to better align with new content from Hollywood. The reopening was previously slated for between July 3 and July 17.

So what

Reopening theaters is the essential next step for the survival of Cinemark and the industry. Peer AMC Entertainment (AMC 6.79%) continues to walk the tightrope between solvency and bankruptcy, but opening movie houses with little to no content to show is self-defeating.

Moviegoers cheering in theater

Image source: Getty Images.

Now what

Cinemark said it will screen Unhinged starring Russell Crowe on July 31, the romantic comedy The Broken Hearts Gallery on Aug. 7, and director Christopher Nolan's spy flick Tenet on Aug. 12. Those will be followed by Disney's live-action Mulan on Aug. 21, comedy Bill & Ted Face the Music on Aug. 28, and horror movie A Quiet Place Part II on Sept. 4. 

Theater operators, and the movie studios themselves, are counting on a lot of these big name, big budget films to bring moviegoers back into the seats. Now is not the time for small, artsy films that appeal to narrow audiences. Cinemark, AMC, and Regal all need movies that can pull in large audiences if they want to survive, even as they comply with social distancing guidelines and best practices.

AMC, for example, backtracked on not requiring patrons to wear masks during movies.

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Walt Disney and recommends the following options: long January 2021 $60 calls on Walt Disney and short July 2020 $115 calls on Walt Disney. The Motley Fool has a disclosure policy.

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