The ongoing COVID-19 coronavirus pandemic has not been kind to people or the entertainment industry. And now, if a prediction from one analyst is correct, AMC Theaters may have to go to drastic measures to make a comeback in the months following the outbreak’s decline.
The popular theater chain has been closed for around a month, resulting in the furloughing of all 600 of its corporate staff – even the company’s CEO, Adam Aron. It doesn’t appear that the pandemic will ease up anytime particularly soon, either, leaving AMC in a bad position when the time comes to reopen their doors later in the year.
This week, Wall Street analyst Eric Handler shared his predictions for the company, going so far as to say it’s almost guaranteed that they’ll be forced to file for Chapter 11 bankruptcy.
In a Thursday report, the analyst stated:
Based on our view that theaters will be closed until at least August and our belief that AMC lacks the liquidity to stay afloat during that time, we expect the company will soon be faced with filing for bankruptcy. Further fueling our liquidity concerns is AMC’s decision to stop paying rents to landlords.
Further into the report, he went on to say:
We believe the company’s monthly cash burn rate in a no-revenue environment is running at $155 million per month, which likely keeps AMC liquid until June/July.
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The closure of theaters around the country has resulted in lengthy delays for films. Black Widow was delayed indefinitely before getting a new November 6th release date, Fast & Furious 9 has been pushed to 2021, and some movies, like Artemis Fowl, are even skipping cinemas. Even if AMC is able to reopen sooner than expected, these delays will leave few, if any, films for them to show to moviegoers until far later in the year.
The novel coronavirus has now infected nearly 1.5 million people worldwide with a death toll rapidly closing in on 100,000. The United States is the epicenter of the disease, too, with 435,000 cases and almost 15,000 deaths, resulting in statewide “stay at home” orders in most of the 50 states. As the outbreak continues pummeling the world, health experts seem to believe we’re nearing the peak, echoing hopes that things will begin to slowly get better from there.