London, England, 2 June 2021, ZEXPRWIRE, Cinema is a part of the culture of the arts. It is fuelled by the lust of man to entertain themselves and is most likely one of the only industries that have been able to keep a consistent hold over the market. When high profile movies are released most people opt to go to cinemas and get a front view seat to experience what is essentially an adrenaline rush that doesn’t involve any exercise. Cinema companies have been having a rough time for quite some time now with more and more streaming platforms launching and taking business away from them.
2020 however was supposed to be the year for change in the cinema industry with multiple production companies releasing hundreds of movies all in a single year. Many cinema companies such as AMC were hopeful since their stock prices had been declining for a while now. But everything changed when the global lockdown procedure was implemented around the world owing to the outbreak of the coronavirus epidemic. This resulted in a massive dip in the stock price of cinema companies especially AMC which went from $7.46 in February and went all the way down to $3.22 in mid-march when lockdown took effect.
Trade the Bit broker Jordan Hill analyses the factors that resulted in the stock dip of 2020 and if companies such as AMC and other brands have a chance to redemption in a post-pandemic world.
The Year of Movies
2020 was a big year for movie franchises. Many production companies had gone all in hopes to ride the hype train of the end of a decade and ride it to profits. Some of the biggest franchises in history had planned releases for the general public to cater to their fan bases and attract more viewers to boost their net revenue. This prompted many companies to set their releases in the middle of the new year so that a maximum number of viewers could watch their products.
However, when the pandemic struck, many theatres had shut down as a precautionary measure and a majority of the movies set to release in 2020 were postponed either to later the same year or the next year altogether. Later on, production houses postponed their releases indefinitely with many big-name titles having no official release date for weeks.
While many theatres had initially shut down, some did remain open but operated at minimum capacity with increased screening setup by management in hopes of keeping their doors open and staying in business. Demand for open theatres was high since many folks were tired of staying at home for weeks at a time. This resulted in a few good rises during the de-escalation period when cases had reached somewhat of an equilibrium. However, as soon as cases would rise, stock prices would be affected directly. This led to a rocky few months when pretty much every trader was crunching his or her teeth hoping for the best.
A Ray of Light
Everything changed when an emergency approved vaccine was released to the public. The launch of multiple vaccines back to back gave cinema companies such as AMC some breathing room because the pandemic had kept them in a chokehold for months. Major governments have announced vaccinations for their citizens which is an amazing room for theatres that are yearning to welcome back their customers.
2021 doesn’t exactly have the same ring to it as 2020 did but it will be known as the year when humanity finally came together to stamp out what is most probably the biggest worldwide event of the 21st century.
Can AMC make a comeback?
It has undoubtedly been a strange 2 years with the pandemic and markets crashing and rising back to back. It has taken a toll on a lot of people but the future seems bright. Analysts predict that with most of the big-name releases of 2020 postponed to release in 2021 there is a chance for theatres to regain lost ground. We can see investors taking up AMC stock with the value of a single unit climbing to a whopping $20.22. Considering that it was hanging at $3 nearly 13 months ago, it is promising to see this valuation because the pandemic hammered out the industry.
There is still a chance that the stay at home order prompted many viewers to stay at home and simply stream events but research predicts that people are more likely to go out to the movies if it means getting a change in routine. All in all, 2021 might turn out to be a good year for AMC and other theatre companies.
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