Movie Theater Chain Stocks Collapse During Dismal Summer

Regal Entertainment has seen shares plunge 28 percent while AMC Entertainment dropped a dramatic 45 percent.

Woe unto those who have owned stock in movie theaters this summer, as their investments have been thrashed even in a bull market, the impetus being lousy attendance in the past three months.

The largest chain, AMC Entertainment, with 11,083 screens in 1,009 theaters, has been hit hardest, its shares dropping a dramatic 45 percent since Memorial Day while the Dow Jones Industrial Average has gained nearly 4 percent.

Regal Entertainment (7,379 screens in 566 theaters) has seen shares plunge 28 percent in the same time frame while shares of Cinemark Holdings (5,926 screens in 529 theaters) have dropped 18 percent.

Owners of Imax, which operates a network of 1,257 giant movie screens at theaters worldwide, watched their shares plunge 31 percent while owners of National Cinemedia, the company most responsible for putting advertising on movie screens, saw their shares shed 25 percent of their value since Memorial Day.

Even with It, the scary clown movie from Warner Bros. and Kingsman: The Golden Circle from Twentieth Century Fox yet to come, when final third-quarter numbers come in FBR Capital Markets analyst Barton Crockett predicts a domestic box office of $2.36 billion, which would be nearly a 21 percent slide compared with the year prior.

Because of a strong first quarter and what he predicts will be a strong fourth quarter, the box office should rebound for the entire year, but it will still fall 3.2 percent to $11.01 billion on an annual basis, Crockett predicts.

Ironically, year-over-year totals will decline even though this year’s projected top three movies — Beauty and the Beast, Star Wars: The Last Jedi (both from Disney) and Wonder Woman (from Warner Bros.) — have have outperformed last year’s top three, which were Finding Dory, Rogue One: A Star Wars Story and Captain America: Civil War (all three of which hail from Disney).

In the fourth quarter analysts are expecting big things from Justice League, Thor: Ragnarok and Star Wars: The Last Jedi, then another two Star Wars films next year. But even if the box office rebounds in the near term, it could be tough sledding for the long haul if premium video on demand becomes reality.

Studios may launch PVOD — where consumers get a movie on their TV screens for about $30 shortly after its release into theaters — as early as this year, say some observers. MoffettNathanson Research…

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