Theaters continue to struggle in a world ravaged by Coronavirus, AMC, most of all. The company had already been struggling with declining revenues that were only exacerbated by the onset of global lockdowns. Recent news has had the company restructuring its debt and making serious plans to address an ever dwindling cash pool. Their latest plan? Raising $47.7 million dollars through sales of shares.
A Securities and Exchange Commission report, published just recently, shows the company is hoping to sell around 20 million shares at $2.39 per share. This is despite the fact that share prices recently fell to a value of $2.15 per. In the filing, AMC listed as risks: “the impact of the COVID-19 virus on us, the motion picture exhibition industry and the economy in general, ongoing fallout from the COVID-19 pandemic" and "our ability to obtain additional liquidity and our ability to continue as a going concern.”
It's been a long and difficult road for AMC. Back in October, the theater chain warned that it may have to file for chapter 11 bankruptcy if it was not able to attain any other source of funding. Before that, a credit rating agency, S&P, warned the corporation that it was at risk of defaulting on its debts. Despite the fact that AMC is the largest theater chain in the United States, the combination of the pandemic lockdowns and lack of major blockbuster releases has left it in dire financial straights, devastating their income streams.
While the theater industry is slowly starting to reopen, it hasn't been enough to give AMC the kick it really needs. Not to mention the fact that major markets like San Francisco and New York City remain under lockdown rules, preventing any sort of moviegoing. The latest box office numbers were led by Come Play, a horror movie that made $3.15 million with its debut. While that was enough to take the top spot, it's nothing compared to what theaters used to pull in, and certainly isn't going to prop up AMC by itself. For now, all the company can do is continue to bolster its cash reserves however possible, and hope the pandemic is resolved as swiftly as possible.
Source: Variety