Will Coronavirus Be the Last Act for Movie Theaters?

A lot has changed in recent months since I called the dividend of AMC Entertainment (NYSE: AMC) a relatively safe bet. Not only has that dividend payout since been slashed, but it's looking increasingly likely there will be no future dividends at all. AMC CEO Adam Aron said in a recent interview with CNN Business (a subsidiary of AT&T) that his company "literally doesn't have a penny of revenue coming in the door," as all of its theaters around the world are closed due to coronavirus. AMC theaters in the U.S. will remain closed for at least six weeks starting March 17. And once they do reopen, the lack of fresh releases in the pipeline -- thanks to studios indefinitely delaying so many premieres -- means that there won't be much to draw customers back to the cineplex, meaning the situation is unlikely to improve any time soon.

To put it simply, AMC and its peers like Cinemark Holdings (NYSE: CNK) and Cineworld Group (OTC: CNWGY) are in a world of hurt, with the latter having been reduced to penny-stock status in the last month. AMC and Cinemark shares are down 74% and 70%, respectively, in the last year. With banks inundated with requests for cash, Aron's call for loans and other government assistance to stay afloat in the short term will be one to keep an eye on.

Image source: Getty Images.

Source Fool.com