AMC Entertainment’s stock sinks after warning of cash crunch by year end, or early 2021

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Shares of AMC Entertainment Holdings Inc. sank 4.9% in premarket trading Tuesday, after the movie theater operator warned that given the reduced fourth-quarter movie slate, its cash resources will be depleted by the end of 2020, or early 2021, unless it raises a “material” amount of liquidity or attendance levels increase. The company said it continues to explore potential sources of liquidity, including additional debt and equity financing, renegotiations with landlords regarding least payments and potential asset sales. “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 disclosed in an SEC filing. Separately, the company said it has resumed operations at 494 of its 598 U.S. theaters, but at capacities of between 20% and 40%. The company said major movie releases that were scheduled to be released in the fourth quarter have either been rescheduled for 2021 or will be released directly through streaming, “leaving a reduced slate of movie releases for the remainder of the year, and release dates may continue to move.” AMC said that trend may be exacerbated as certain competitors have temporarily reclosed their theaters. The stock has tumbled 43.7% year to date through Monday, while the S&P 500 has gained 9.4%.
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