Blame the Trolls... It's been a wild year for the world's largest movie theater chain — we'd never thought we'd cover so many AMC headlines in our lives. AMC's 11K+ movie screens around the globe have been closed since mid-March — now everyone is biting their nails over how this blockbuster will end:
- In April, AMC shares soared on word it had enough cash to survive until partial theater reopenings around Thanksgiving — AMC also said it would raise $500M in debt.
- A few weeks later, drama erupted over the Trolls World Tour movie, which was a smash success after Universal released it straight to streaming. Then AMC banned all Universal movies from its theaters.
- In May, rumors swirled around the possibility of an AMC acquisition by Amazon.
- Now, AMC says it has "substantial doubt" that it can remain in business. Lots of twists.
"We are generating effectively no revenue..." Not the first thing investors want to see in a regulatory filing. But as we know, public companies are required to be brutally honest about financials.
- Sales fell 22% in the first quarter, and AMC expects to have lost between $2.1B-$2.4B.
- AMC still believes it has enough cash to survive until a reopening "this summer or later." But opening isn't the only issue...
No one can be 100% self-reliant... Most businesses are reliant on others in some form or other to continue doing what they do. Even if movie theater restrictions are lifted, movie studios could still hold back on production and new film releases. Plus, some consumers might not feel comfortable going back to stranger-packed theaters for a while. These factors are out of AMC's control — but their timing will determine how long it can survive.