Shares of AMC Entertainment Holdings Inc. climbed almost 4% in extended trading on Wednesday after the movie theatre chainsaid98% of its U.S. locations will be open beginning Friday.
What Happened:With additional openings in the U.S. expected over the next week, AMC expects 99% of its U.S. circuit will be open by March 26.
More than 40 AMC locations in California will reopen beginning Friday, including all 25 locations in Los Angeles County and all eight locations in San Diego County.
The company expects 52 of its 54 California locations to be open by Monday including two brand new theatres in the Los Angeles area that will be serving guests for the first time ever.
AMC Porter Ranch 9 at the Vineyards at Porter Ranch will open on Friday, March 19. AMC DINE-IN Montclair Place 12, the company’s newest dine-in location will open for the first time on Monday.
Why It Matters:AMC and other movie chains have been struggling following the closure of theatres amid the pandemic. The company now expects the rollout of Covid-19 vaccines in the U.S. and the release of blockbuster movie titles in the coming months to boost sales this year.
It was reported last week that AMC is likely getting discounts on film-rental fees from AT&T Inc.’s Tsubsidiary WarnerMedia. A discount on film-rental fees, which usually account for a huge share of a theatre chain’s costs, could boost AMC’s gross margins while it struggles with a cash crunch.
Nevertheless, AMC’s stock has been popular among retail investors and surged in January along with other heavily-shorted stocks such as GameStop Corp.. These so-called meme stocks continue to see high retail investor interest in March, including from the Reddit community r/WallStreetBets.
Price Action:AMC Entertainment shares closed 4.2% higher on Wednesday at $13.56 and further rose 3.8% in the after-hours session.