This damn year! AMC Theaters entered Q2 of 2020 by considering bankruptcy. Then, as COVID-19 began to stop spiking like a diabetic at a candy bar, AMC Theaters considered a national opening party. Only there was one catch — the cost to spruce up the cinemas with full Corona disinfectant would be on the customer. Classy, right?
Then, we find out movie theaters are closing. And now, Disney Plus is considering taking its ball and going home to VOD for keeps. A cinephile can only take so much in one year. We miss going to the movies, but since Cineworld closed…eh, suspended operations in the U.S. and UK, there are less places to enjoy them.
And by the end of 2021, there may be a ton less!
AMC Seems SOL
In a public filing with the U.S. Securities & Exchange Commission (SEC), AMC Theaters declared that unless audience attendance trends higher, or a new source of liquidity emerges, the company is likely to exhaust its cash supply by the end of 2020 or early 2021.
Upon hearing that horrible news, AMC Theaters shareholders showed their gratitude by tanking the stock by 11%. This is a stock that has already plummeted more than 48% this year already.
The filing showed that while that flickering candle is running out of wick, hope is not lost completely. As of Friday, AMC Theaters have been able to “reopen 494 of its 598 U.S. theaters, but only at a limited capacity of 20% to 40%.” The remaining theaters still shuttered are in California, Maryland, New York, North Carolina, and Washington.
Where Do AMC Theaters Go From Here?
While this nation is still adding about 50,000 Coronavirus cases each day, restrictions are easing but they are still choking business. Mind you: It’s not the restrictions killing business; it’s people who just won’t respect the guidelines. And since the CDC should just be peeing in the wind, that is what’s killing business.
Unfortunately, movie theaters are about to become this disease’s most influential victim.
The company is looking into additional debt and equity financing, renegotiating with landlords concerning lease payments, possible asset sales, a joint-venture with an existing business partner and minority investments in its stock.
“There is a significant risk that these potential sources of liquidity will not be realized or that they will be insufficient to generate the material amounts of additional liquidity that would be required until the company is able to achieve more normalized levels of operating revenues.”
AMC Theaters, SEC Filing, October 2020
The case is clear: Unless you enjoy VOD that much, consider wearing a mask, washing your hands, and go see a damn movie. Trust: You will surely miss the theaters when they are gone and become used car lots.
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