Bankruptcy Watch: Is AMC Stock in Danger?
AMC Entertainment Holdings (NYSE: AMC) is facing devastating impacts from the coronavirus pandemic. A vast majority of its theaters were asked to close down for several months and are only slowly coming back online at reduced capacity. The effect is that the company is burning through cash at an alarming rate and may not have enough to avoid filing for bankruptcy protection.
AMC is pulling out all the stops, doing everything in its power to reduce expenses and increase liquidity. Moreover, its shares are being swept up in the Reddit-induced buying frenzy that has increased its stock price by over 500% in January. The frenzy started with GameStop and has since evolved to include other stocks like BlackBerry and Bed Bath & Beyond. That development may allow AMC to raise additional equity capital, which could be a bridge that allows it to survive until it's operating at full capacity. Let's take a look at how close AMC is to bankruptcy.
AMC theatres are empty more often than not as a result of the pandemic. Image source: Getty Images.
Source Fool.com
