Movie theaters have been closed around the country an initial market reaction looks horrible, CNBC reported. Cinemark was trading down nearly 40 percent on Monday. AMC Entertainment was down about 20 percent, and its market capitalization was below $300 million.
Movie theaters won’t disappear completely, LightShed analyst Rich Greenfield said Monday in a note to clients. Pay-per-view wouldn’t come close to making up for box office ticket sales, he said as he explained the math for how much a studio makes releasing a movie in theaters globally versus how much it would have to charge per household on-demand.
“Between the quality of TV content improving, streaming services like Netflix introducing original movies, and then add in theaters closing for months, which may lead some to go out of business or go bankrupt, and it’s hard to believe theater attendance is going to come back to what it was,” Greenfield said.
The longer consumers live without gyms and other location-based businesses (spas, salons) the harder those businesses may have to work to win consumers back, said Gregory Milano, CEO of Fortuna Advisors, a strategy consulting firm that specializes in capital allocation and behavioral finance.
Peloton built a $6 billion enterprise by taking on gyms with Internet-connected home fitness classes on its bikes and treadmills. Its shares rose more than 12 percent on Monday — the same percentage the S&P 500 lost — as investors bought into home fitness classes.
