AMC Soars After New York Moves to Lift Restrictions on Theaters

(Bloomberg) -- Shares of AMC Entertainment Holdings Inc. and other movie-theater chains surged on Monday after New York Governor Andrew Cuomo announced that some theaters in the state would be able to reopen.

AMC jumped as much as 28% to $3.88, the biggest intraday gain in five months. It had been down 58% this year through the end of last week. Cinemark Holdings Inc., meanwhile, climbed 13% to $8.90 on Monday.

Cuomo said over the weekend that cinemas can reopen at 25% capacity Friday -- excluding locations in New York City and counties with high infection rates -- with up to 50 people allowed per screen. He also said ski resorts can open at limited capacity beginning Nov. 6.

AMC, the largest cinema company in the world, plans to open about 12 locations in New York state. With the move, the chain expects to have about 530 of its 600 theaters operating again by the end of October.

While theaters in the key market of New York City will remain closed, the move is “a positive step toward reopening those theaters in the coming weeks,” B Riley FBR analyst Eric Wold said in a note.

The theater industry has been struggling to rebound, and restrictions in New York and Los Angeles have kept its two largest markets closed. It also lacks new blockbuster films from Hollywood, making it harder to attract filmgoers even in areas that have reopened.

In the U.S., about 48% of theaters have reopened so far, according to researcher Comscore Inc.

New York’s limited cinema opening is “welcome news” for the industry, said Paul Dergarabedian, senior media analyst at Comscore. “As we’ve seen in Los Angeles, those counties within commuting distance of closed cities have seen a notable uptick in attendance.”

AMC has said it’s doing everything it can to raise fresh cash to weather the pandemic. Cineworld Group Plc, which runs the Regal chain, has temporarily suspended operations at all its American and British movie theaters.

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