Why AMC Entertainment Stock Nose-Dived 11% at the Open Today
Shares of movie theater operator AMC Entertainment (NYSE: AMC) fell 11% out of the gate on Oct. 13. Although it quickly recovered some ground, the stock was still lower by around 8% at 10 a.m. EDT. That the drop wasn't larger suggests that investors are well aware of how bad things are at AMC.
That said, in an update filed with the Securities and Exchange Commission, AMC laid out the situation: "given the reduced movie slate for the fourth quarter, in the absence of significant increases in attendance from current levels or incremental sources of liquidity, at the existing cash burn rate, the Company anticipates that existing cash resources would be largely depleted by the end of 2020 or early 2021." That's troubling news and suggests that AMC's risk of bankruptcy has materially increased, largely driven by the ongoing impact of COVID-19.
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Source Fool.com
