By Supantha Mukherjee
(Reuters) – AMC Entertainment Holdings Inc said on Monday it will limit attendance at its U.S. theaters to a maximum of 50 people per show, effective immediately, due to the spread of coronavirus, sending its shares down 21%.
The U.S. Centers for Disease Control and Prevention (CDC) on Sunday issued a guidance to cancel or postpone events throughout the country that consist of 50 people or more for the next eight weeks.
U.S. officials have so far recorded nearly 3,000 cases and 65 deaths. Globally, more than 162,000 have been infected and over 6,000 have died.
AMC said it was adhering to CDC’s recommendation even though it was not a legal requirement for businesses in most U.S. jurisdictions.
“We anticipate that these headwinds are transitory and we expect a growth reset over the medium term,” Benchmark analysts said after downgrading the stock to “hold” from “buy”.
However, the brokerage said it was concerned if AMC will have enough financial flexibility to cover a longer-than-anticipated slowdown or a complete shutdown of its theatrical network.
AMC operates 1,004 theaters and 11,041 screens in 15 countries, including 636 theaters and 8,094 screens in the United States.
Theater chains, which have been facing off against streaming services Netflix and Disney+, were also hit by postponement of several films.
Hollywood studios have postponed upcoming blockbuster film James Bond thriller “No Time to Die”, Disney’s epic “Mulan” and the ninth “Fast and Furious” movie from Comcast Corp’s Universal Pictures.
AMC and Cineworld Group Plc’s Regal Cinemas on Friday halved their seating capacity to allow more space between moviegoers to prevent virus transmission.
Marcus Theatres, an unit of Marcus Corp, also said on Monday it plans to limit capacity by 50%.
Rival Cinemark Holdings did not immediately respond to requests for comment on the latest steps it has taken.
Cinemark shares were down 20%, and those of London-listed Cineworld’s fell 17%.
Shares of AMC have more than halved so far this year.
(Reporting by Supantha Mukherjee in Bengaluru; Editing by Saumyadeb Chakrabarty and Shinjini Ganguli)
