AMC falls 25%, extending selloff for 2nd day after saying it may run out of money before year-end

amc movie theater nyc covid19
A view outside AMC 34th Street 14 movie theater during the coronavirus pandemic on May 14, 2020 in New York City.
  • AMC fell as much as 25% Wednesday, extending its selloff for the second day after reporting that it may run out of cash before the end of the year.
  • On Tuesday evening AMC CEO Adam Aron told Bloomberg that the theater chain is not considering bankruptcy at the moment and instead is trying to raise additional money. 
  • Shares of the world's largest theater chain are down roughly 59% year-to-date. 

AMC fell as much as 25% during Wednesday trading in its second straight day of decline after warning investors it might run out of cash before the end of the year.

Shares of the world's largest theater chain fell 11% Tuesday when it revealed in a Securities and Exchange Commission filing it will likely exhaust its cash supply unless audience attendance increases or a new source of liquidity emerges.

On Tuesday evening AMC CEO Adam Aron told Bloomberg the company is not considering bankruptcy at the moment.

"We're going to throw all of our efforts now into raising additional capital, primarily equity, to lengthen our runway even more," he said. "We'd like to succeed in this effort. If we don't, obviously we'll have to consider other options down the road. But that time has not yet arrived, and any reports to the contrary are wholly inaccurate."

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According to the SEC filing, there's a "significant risk" AMC's efforts to raise cash won't materialize before the company runs out of capital, especially with many AMC theaters still closed due to COVID-19. The theater chain listed debt and equity sales, renegotiating with landlords, potential asset sales, and joint ventures with business partners among some of its funding options. 

Shares of AMC are down roughly 59% year-to-date.

Read the original article on Business Insider

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