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NEW YORK, NY – MARCH, 17: A Regal Cinemas remains closed on March 17, 2020 in New York City. Schools, businesses and most places where people congregate across the country have been shut down as health officials try to slow the spread of COVID-19. (Photo by Victor J. Blue/Getty Images)
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Shares of movie theater operators took a deep dive Monday, after the U.K.’s Cineworld Group PLC said it will temporarily suspend operations at all of its theaters, as the release of the latest James Bond film was delayed for a second time.
Cineworld’s move impacts its 536 Regal theaters in the U.S. and 127 Cineworld and Picturehouse theaters in the U.K., from Oct. 8. Cineworld had acquired Regal Entertainment Group for $3.6 billion in a deal that closed in February 2018.
Cineworld’s U.S.-listed shares CNNWF, -32.69% plummeted 36% in morning trading, while its U.K.-listed shares CINE, -36.15% plunged 36% toward the lowest close in six months.
That weighed on shares of other movie theater operators. Cinemark Holdings Inc.’s stock CNK, -17.93% tumbled 16%, putting it on track for the lowest close since April 3. Trading volume swelled to 13.3 million shares, compared with the full-day average of about 7.5 million shares.
AMC Entertainment Holdings Inc. shares AMC, -11.01% dropped 11%, and was headed for the lowest close since Aug. 5.
AMC’s stock has now lost 40% since its closed at a more than six-month high on Sept. 2, while Cinemark shares have shed 47% over the same time. Year to date, shares of AMC have shed 43% and Cinemark have slid 75%.
The U.S.-listed shares of Toronto-based Cineplex Inc. CPXGF, -23.46% sank 20%, while the Canada-listed stock CGX, -25.11% lost 22%.
BMO Capital analyst Tim Casey downgraded Cineplex to underperform from market perform, citing “elevated concerns” regarding the COVID-19 pandemic in Canada, and particularly Ontario. Casey said release postponements warrant a reduction in financial forecasts for Cineplex “and highlight potential balance sheet risk” for the company in 2021.
