AMC Theatres Could Run Out of Cash by the End of This Year
AMC Theatres could be in big trouble if things don't change soon and audiences can get back to the movies. They have announced that they may run out of cash by the end of this year or early 2021.
"Given the reduced movie slate for the fourth quarter, in the absence of significant increases in attendance from current levels or incremental sources of liquidity, at the existing cash burn rate, the Company anticipates that existing cash resources would be largely depleted by the end of 2020 or early 2021. Thereafter, to meet its obligations as they become due, the Company will require additional sources of liquidity or increases in attendance levels. The required amounts of additional liquidity are expected to be material," said AMC.
Major markets like New York City and Los Angeles are still closed, which is a huge loss alone. That's coupled with decreased capacity in 494 of its 598 U.S. locations.
"There can be no assurance that the assumptions used to estimate our liquidity requirements and future cash burn will be correct, or that we will be able to achieve more normalized levels of attendance described above, which are materially higher than our current attendance levels, and our ability to be predictive is uncertain due to the unknown magnitude and duration of the COVID-19 pandemic," AMC said.