Movie Theater Stocks Continue To Fall Despite Efforts To Address Concerns

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Exhibition stocks are bleeding again — suggesting that the market was not persuaded by AMC Entertainment CEO Adam Aron’s effort on Friday to address concerns about his company and the industry.

Prices for all of the major chains started to slip yesterday, and are way down today with AMC, Regal Entertainment, Imax, and cinema ad sales company National CineMedia touching 52-week lows.

Over the last two days AMC’s stock price fell 10.2% (including 6.5% in mid-afternoon trading today), National CineMedia is -9.8% (-4.1% today), Imax is -4.1% (-0.6% today), Regal is -3.8% (-2.6% today), and Cinemark is -2.8% (-2.5% today).

The overall market, measured by the Standard & Poors’ 500, was -1.2% as investors grow increasingly concerned that U.S. and North Korea might act on escalating threats to engage in military actions.

Several analysts were at a loss to identify a catalyst for the steep drops for exhibitors.

Yesterday research firm IHS Markit noted that short sellers recently “materially increased their positions” in exhibition chains. Short sellers bet that a company’s stock price will fall; they borrow shares and then sell them hoping they can buy them back at a lower price before they have to return them to the original owner.

See more at Deadline.

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