The Event Hospitality and Entertainment Ltd (ASX: EVT) share price is having a wild day. Event shares closed at $11.06 yesterday but opened at $11.77 this morning. The share price has been bouncing around this level ever since, despite a quick but sharp drop to $11.31 soon after market open.
Event shares are trading at $11.74 at the time of writing, a 6.15% rise for the day. Today's move caps off what has been a great, if volatile, year for the company. Event was hard-hit in the coronavirus-induced market crash last year. The company bottomed out at a share price of $5.44 back on 23 March 2020. But it has been onwards and upwards for Event from there. Since 23 March, Event shares are up a healthy 115% going off of today's pricing.
So who is Event? And why are the company's shares doing so well today?
Cinemas and resorts hard hit
Event Hospitality is, as its name implies, a company that runs hotels and movie cinemas. You have probably seen one of its cinemas in at least one of the country's major towns and cities, given there are 142 spread across Australia, as well as New Zealand. The company also operates the Rydges, QT and Atura hotel and resort chains and the Thredbo Alpine Resort near the Thredbo ski fields.
Event can also boast the State Theatre in Sydney in its portfolio, which was originally opened in 1929 and is now one of Australia's oldest and most famous theatres.
As you might imagine, Event was not a company that escaped the pandemic and its associated lockdowns and social gathering restrictions lightly. Just last month, Event reported that revenues were down 58% over the six months to 31 December 2020 compared with the prior period in 2019. However, the company did manage to cut costs drastically, going from burning $20 million a month over March-June to $5 million a month over the six months to December.
Why is the Event share price rising then?
Given these not-too-encouraging statistics from the company's earnings report, why is the Event share price on the move today? It's not just today either, actually. Event shares are up 18.2% over the past month and 22% over 2021 so far.
Well, the company has not made any major market announcements since its earnings on 18 February. Thus, we can probably put investors growing enthusiasm down to coronavirus optimism—specifically, the snowballing rollout of coronavirus vaccines around the country and the world.
Since the Christmas time Northern Beaches outbreak in New South Wales, Australia has not had a major virus outbreak. That might explain the positive year-to-date share price performance for Event. Today, we have just had an announcement of a tourism stimulus package from the federal government. This includes cut-cost airline tickets, as well as other stimulatory measures for the tourism sector. This could also be feeding into market optimism for Event as well.
Whatever the reasons, I'm sure Event shareholders are pleased with what 2021 has brought so far, especially with today's Event share price moves. At the current price, the company has a market capitalisation of ~$1.88 billion.
