AMC has been having a rough year. After being closed for moths, then opening to limited capacity and a scared public, and movie studios refusing to release their tentpole movies AMC has seen a sharp decline in revenue. That decline in revenue is now reaching it’s breaking point as the company is desperately trying to sell off stock in order to keep itself afloat.
As we reported back in October AMC could potentially run out of money by the end of the year. At the time it was reported that AMC has seen an 85% drop in attendance since reopening. That loss in attendance has forced the company into a bad position as they struggle to make up for the lost revenue. At the time it MAC’s Filing with the SEC stated it would need significant amounts of liquidity to avoid having to file for Chapter 11 Bankruptcy.
“We will require significant amounts of additional liquidity and there is substantial doubt about our ability to continue as a going concern for a reasonable period of time; holders of our Class A common stock could suffer a total loss of their investment,”From AMC’s SEC filing
Now it seems that AMC has settled on selling stock to generate revenue. According to an SEC filling Money morning, AMC is looking to sell off 20 million class A shares. This would net the company roughly 50 million in new capital.
Can AMC Be Saved?
This new move, as well as many others, are merely short term solutions. The 50 million AMC stands to gain from selling stock is the same amount of loan money they took out back in June to last until now.
What AMC, and other theaters, need are movies. We know that movie companies have at least a few big blockbuster movies complete and ready to go. However, the steep drop in audience attendance and has made them reluctant. Tenet released back in October to a paltry 20 million. Theaters need new movies to attract an audience. And movie companies need guaranteed audiences before releasing movies.