Why Movie Theater Stocks Are Crashing Today
Shares of leading movie theater chains and related services plunged on Monday as the novel coronavirus took a heavy toll on this industry's near-term business prospects. By 2:10 p.m., EDT, theater chain operator AMC Entertainment Holdings (NYSE: AMC) traded 18% lower and extra-big-screen technologist IMAX (NYSE: IMAX) had dropped by 19.5%. Theater chain Cinemark Holdings (NYSE: CNK) recorded a massive 38.7% price cut. Regal Entertainment parent Cineworld Group (OTC: CNWGY) took the hardest hit of all as share prices crashed 71% lower. In-theater advertising specialist National CineMedia (NASDAQ: NCMI) followed the theater operators down with a smaller 8.4% drop.
The federal interest rate cut that caused a marketwide panic today didn't really factor into Hollywood's worries. The companies mentioned above are suffering some very direct effects from the coronavirus.
First, several theater chains announced that they would limit movie audiences in order to support the disease-controlling strategy known as social distancing. AMC Theatres capped its ticket sales to 50% of the number of available seats. Regal was quick to follow suit.
Source Fool.com
