AMC Stock Plunges 10% As CEO Says Theaters Won’t Open Before June

Shares of AMC Entertainment (NYSE:AMC) are trading 10% lower today as the theater chain struggles to cope with the consequences of the COVID-19 outbreak.

Fundamental analysis: CEO targets mid-June for reopening

CEO of AMC Entertainment, the world’s largest movie theater chain, is not sure when the ongoing crisis will end, but he hopes to have cinemas open by mid-June.

“The summer has always been one of the biggest movie seasons of the year, the summer and Christmas. I would love to think,” said Adam Aron, CEO of AMC Entertainment.

The company said earlier that it hopes to have the cinema open in 6 to 12 weeks. As a result, it is planning to release blockbusters during the summer period. The major movie makers, such as Sony, Disney, and Universal, have already pushed back release dates for new movies.

For obvious reasons, Aron doesn’t agree that the world is shifting from conventional cinemas to home entertainment.

“I’ve been reading for years about a perception that there was going to be a switch towards home entertainment. I think if we learned anything in the last two weeks is people just so want to get out of their houses. I think we’re all feeling cooped up and want to get out and have life return to normal,” said Aron.

Earlier, AMC Entertainment announced it furloughed almost all of its staff, including the CEO and 600 workers at its corporate headquarters, to save funds amid the COVID-19 outbreak. Around 26,000 out of 27,000 employees are either placed on greatly reduced pay, or receive no compensation at all.

Technical analysis: Stock price trading near the record lows

Shares of AMC are trading near the record lows after losing nearly 50% of value in March. The AMC stock price had been trading in a downtrend since 2016, when shares had traded near record highs around the $35 mark.

The price action had been trading in a descending wedge since 2016, before a break occurred in mid 2019. A break below the $4 handle also marked a break of the important support line in the context of the 161.8% Fibonacci extension.

The bulls will need to push the price action above the $4.15 mark before thinking about a more substantial recovery.

Summary

Shares of AMC are trading near record lows as the world’s largest cinema chain struggles to survive amid the coronavirus outbreak. Earlier, the company furloughed more than 98% of its staff to save funds, while the CEO believes cinemas won’t open before mid-June.