In a filing with the U.S. Securities and Exchange Commission, AMC noted that it believes it has the cash to reopen its theaters later this summer or later, but the company cautioned that it can’t guarantee its projections will prove correct, as it is dealing with an unprecedented situation.
AMC said its projections will hinge on the timing of movie releases and the company’s ability to generate revenue – which is a big question mark, experts say, given the reluctance of consumers to rush back to crowded public settings amid the ongoing pandemic.
A PYMNTS survey from late April found that just 28 percent of U.S. consumers were eager to return to their old activities and leave their homes more often, believing the epidemic will continue to rage for several more months.
“We have never previously experienced a complete cessation of our operations, and as a consequence, our ability to be predictive is uncertain,” AMC noted in its filing with the SEC.
And if the timeline for reopening its theaters is thrown off – or worse, if a second wave of coronavirus infections forces another shutdown – AMC contends it may require additional financing that “may not be available on favorable terms or at all.”
“Due to these factors, substantial doubt exists about our ability to continue as a going concern for a reasonable period of time,” the company informed federal securities regulators.
Shares of AMC sank on news of the company’s “going concern” warning, edging down 0.72 percent to $5.55 a share.
Meanwhile, as AMC struggles to keep the lights on, Amazon is weighing a potential deal for the struggling movie theater empire.