Why Cinemark and EPR Properties Stocks Both Plunged Today
Shares of movie theater operator Cinemark Holdings (NYSE: CNK) fell more than 10% at the open on Oct. 13. Following along was theater-owning real estate investment trust (REIT) EPR Properties (NYSE: EPR), which dropped nearly 8% in early trading on Wall Street. The drop in both stocks was driven by negative news out of AMC Entertainment (NYSE: AMC), which itself was down as much as 11% early on.
In a Securities and Exchange Commission filing, AMC noted that it might run out of cash by the end of 2020 or in early 2021. A large part of that trouble is related to the broader movie industry. Specifically, AMC noted that movie studios were delaying key release dates, which was helping to depress movie attendance. In fact, in some cases, movie studios are canceling theatrical releases altogether and going directly to streaming options. That has resulted in dramatically reduced revenue for AMC (down 85% year over year, according to the filing) and put it in a precarious financial situation. Of course, all this relates back to the economic impact of COVID-19, which has consumers staying home and continues to keep some nonessential businesses shut, including movie theaters in California and New York.
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Source Fool.com
