Movie theater chains got some good news on Monday morning — trial data indicated Pfizer and BioNTech's Covid-19 vaccine is more than 90% effective.
The news sent AMC shares soaring as high as 80% in premarket trading before settling around a 50% gain after the opening bell. Cinemark shares were trading up about 52%, while Marcus Theatres and IMAX were gaining about 18% in early morning trading.
The coronavirus pandemic has battered theaters since March, crunching their bottom lines and threatening to push chains big and small towards bankruptcy. As of the close on Friday, Cinemark shares were down 74%, AMC was down 66% and Marcus was down 75%.
Last week, these movie theater chains reported third-quarter results, signaling yet another period of losses.
With movie theaters hauling in less than a quarter of the revenue they were generating last year, AMC and B&B Theatres, the sixth-largest cinema chain, have both warned of the possibility of bankruptcy. Studio Movie Grill, a Dallas-based dine-in theater chain, filed for Chapter 11 bankruptcy protection last month.
The hope is that with a vaccine, Covid-19 cases will decrease substantially and audiences will be more willing to return to theaters. This, in turn, will give studios confidence to keep major film titles on the calendar. Without fresh content, moviegoers won't return in droves.
Still, a vaccine might not be widely available to the public until mid-2021. So, while the news is promising, it does not fix the near term issues that movie theaters are facing.
To stay afloat, cinema chains have been renegotiating deals with lenders and landlords and developing creative ways to generate revenue.
Most major cinemas are now offering up cheaper private theater rentals as a way to entice in reluctant moviegoers. Others have transformed parking lots into concert venues, launched trivia nights and even negotiated deals with local colleges to rent out the space for in-person learning.
