What happened
Movie-theater chain AMC Entertainment (AMC -2.01%) is in the process of giving back last-week's gains. Shares are down 3.5% at 10:32 a.m. ET on Monday.
Last week, AMC announced it took a near-7% stake in movie-advertising outfit National CineMedia. As a result, AMC's stock jumped as much as 21%. Now, however, as the excitement wears off, the movie-theater stock is down to $11.78 per share -- almost where it was trading before any of the gains were made -- even though the broader stock market itself is rising today,
Image source: Getty Images.
So what
It's been an unfortunate consequence of AMC's meme-stock status that its shares are highly volatile, which more often than not causes it to briefly shoot higher, only to end up lower than where it began. That seems to be the case again here.
Also worrisome to the chances of AMC turning around is the threat of a monkeypox outbreak. Very few people had even heard of the illness until a week or so ago, but any communicable disease that can be transmitted through close contact with others could have an impact on people wanting to attend the cinema.
Now what
While AMC is down today, it's not alone. Rival Cinemark Holdings is also off 2.3% in morning trading, as is National CineMedia, which is down over 5%. Conversely, Regal Theater-owner Cineworld is up 3.5% so far.
Although AMC had a decent quarter, relatively speaking, it still needs the rest of the movie lineup scheduled for this year to come through, just for the company to tread water. Any hiccups could derail whatever chance the movie-theater stock has at recovery.
