Movie Theater Stocks Drop After 'Dark Knight Rises' Shooting
UPDATED: One analyst predicts that interest in the Warner Bros. release will be too strong to keep audiences away, but exhibitors may face higher security costs.
Movie theater stocks dropped Friday much further than did the broader markets following the shootings at a Colorado screening of The Dark Knight Rises.
Cinemark, which owns the theater where a gunman killed at least 12 and injured dozens during a midnight screening, saw its stock drop 5 percent to $23.15.
The stock of Regal Entertainment Group, the largest U.S. exhibitor, fell 4 percent to $13.35 while Imax shares dropped 2 percent at $24.02. Shares of Carmike Cinemas also dropped 2 percent, to $14.48.
In contrast, the broad-based S&P 500 stock index fell 1 percent Friday.
But MKM Partners analyst Eric Handler said the effects of the shootings on exhibitors should be "negligible near-term." He explained: "I think right now there is so much interest in The Dark Knight that people aren’t going to be scared out of going to the movies this weekend."
But there could be some pressure on profits. "From a cost perspective, maybe we see an increase in spending for added security," Handler said.
Some theater chains in Europe earlier on Friday told THR that they were planning to beef up security following the shootings and, later, theaters in the U.S. said they'd be following suit.
The stock of Time Warner, whose Warner Bros. film studio has perhaps more riding on the success of Dark Knight Rises than any other company, held relatively sturdy throughout the day. After initially rising, it finished the day down less than 1 percent to $38.86 and the stock was up slightly during the after-hours session.