Cinema stocks plummet after Modest Avatar 2’s opening weekend

Avatar: The Way of Water had a grand opening weekend—just not Pandora-sized.

IndieWire already told you that “Avatar: The Way of Water” alone isn’t the savior the box office needs, but now Wall Street is taking notice. Shares in AMC Entertainment (AMC) and Cinemark (CNK) both fell sharply on Monday, a strong indication that some market watchers were expecting more from the last blockbuster of 2022 at the box office.

Shares of AMC fell 8.26 percent Monday as Cinemark tumbled 10.30 percent (CNK is up a few points in after-hours trading). IMAX closed the first day of trading after the Avatar 2 opening weekend down 5.76 percent. Disney, the studio behind Avatar: The Way of Water, fell 4.77 percent, a low not seen since 2014. (The start of the pandemic came darn close for Disney, which was forced to close theme parks.) The overall stock market was far closer to flat on Monday.

So why the pessimism for these four players? James Cameron’s ‘Avatar’ sequel grossed $134.1 million over the weekend, an impressive number and one of the biggest openings of the year – but it’s not the earth-shattering number that ‘Spider-Man: No Way Home’ (260th million dollars) at the same time a year ago. The opening weekend of “Avatar 2” fell short of initial box office expectations, falling by as much as $50 million at some.

And “Avatar” was pretty much the only thing that got crowds flocking to that weekend. The other films in the top 10 grossed a combined $18 million, missing not only studio fare but also some new platform releases from independent distributors (A24’s The Whale was the exception). It doesn’t help that there’s only so much new stuff coming this coming weekend over the Christmas holidays, including Paramount’s Babylon, Sony’s Whitney Houston biopic I Wanna Dance With Somebody, and Universal’s animated Puss in Boots: The Last Wish “. Hinting at a potentially muted holiday at the cinema.

That said, there could be at least one other Pandora-sized box office savior in early 2023, most notably Marvel’s Ant-Man and the Wasp: Quantumania, as well as a few other genre films like M3GAN, Knock at the Cabin, and Creed III. . And analysts are hoping next year can continue to grow globally from 2022 — though we may have to wait a full year for box office returns to pre-pandemic levels.

However, AMC stock was positive on Monday. AMC CEO Adam Aron reported that the theater chain’s newly issued APE shares — which are preferred stock — raised $162 million for the company this year and reduced $180 million of its debt obligations. In fact, it’s capital that Aron has already leveraged by announcing that AMC had acquired a closed ArcLight Theaters location in Boston.

“While the APE units and our common stock are economically equivalent, it is disappointing that the APE units have consistently traded at a significant discount to AMC common stock since inception,” CEO Adam Aron said in a press release. “While the trading prices of the two securities appear to reflect different market and trading dynamics, the APEs serve the precise purpose they were originally intended for.”

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Lindsay Lowe

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