Going against a market that is largely dropping Tuesday, shares of theater operator AMC Entertainment Holdings (AMC -1.04%) jumped 15% at the market open. Shares gave up most of those gains to remain up about 2% as of 10 a.m. EST.
After a very volatile month influenced by Reddit chat room retail traders, investors are beginning to be able to see the company in a post-pandemic world. Today's bit of light is the announcement that New York City movie theaters will be able to reopen on March 5, after almost a full year of closures.
After raising nearly $1 billion in capital, AMC president and CEO Adam Aron said in January, "This means that any talk of an imminent bankruptcy for AMC is completely off the table." The company subsequently announced a new equity offering raising another $305 million when shares rose with the Reddit-influenced market moves.
At a news conference yesterday, New York Gov. Andrew Cuomo announced New York City theaters can begin opening at 25% capacity on March 5. Theaters will need to assign seating to maintain social distancing, and a maximum of 50 people will be allowed per screening.
But with sufficient capital, and another sign of a return toward normalcy, investors are once again paying attention to entertainment stocks like AMC. Today's initial bounce wore off quickly, but as the business returns, investors will continue to be interested in these types of recovery names.