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Verge: AMC warns investors that the company will run out of cash by January if it doesn't find $750 million

Feep

Feep

Lead Designer, Iridium Studios
Verified
Oct 25, 2017
4,603
I have so many wonderful memories of going to the movies with my friends for big and small releases alike. I don't particularly care for AMC, but I hope the industry survives in some form of another.

A lot of people hate the crowds in theaters, but in Los Angeles, they seemed to always be reasonably respectful. Maybe the culture, idk.
 
samoyed

samoyed

Banned
Oct 26, 2017
15,191
BringBackSonics said:
huh. So what kind of value would AMC have, what would you actually be buying if you bought them? Name recognition?
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You would be buying a bunch of leases on expensive real estate and, most importantly, consumer habit. Every AMC theatre is situated in a hub of habitual moviegoers and buying AMC is buying those moviegoers.

Like when a restaurant reopens "under new management".
 
Tranquility

Tranquility

Member
Oct 28, 2017
541
AMC owns Filmstaden in Sweden which is a monopoly cinema chain. If AMC goes bankrupt it would probably have large consequences for cinemas in Sweden.
 
SeanM

SeanM

Member
Oct 26, 2017
2,433
USA
Advance.Wars.Sgt. said:
What are your thoughts on them spending on acquisitions during a period of physical location downsizing across the board throughout the 10s?

Because that's where they were financially negligent of market trends, and is what is exacerbating their current weakened state.
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I'm definitely not knowledgable about financial decisions and market trends, but in my layman opinion I would view acquiring and renovating theaters as a solid long-term growth strategy.

Of course in hindsight it has bitten AMC in the ass. Now they have a thousand theater locations to pay massive rent on and like 40k employee salaries to pay while doing virtually no business. All I'm saying is that when they were spending all that money, they couldn't have ever predicted a pandemic would shut down their business for the better part of two years.
 
Mett

Mett

Member
Oct 29, 2017
673
No AMC here within like a 3 hour drive, couldnt support them even if I wanted to with covid going on.
 
caliph95

caliph95

Member
Oct 25, 2017
35,187
platocplx said:
I just don't understand how these businesses are all run so poorly that they don't have enough money stashed away to survive more than a year with zero income. meanwhile if this were a regular citizen people would be like they don't need help or bailouts and it's their own fault. While companies get bailed out all the time.
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No company except very few can last a year without revenue
 
Westbahnhof

Westbahnhof

The Fallen
Oct 27, 2017
10,108
Austria
Joni said:
Banks charge money to people with a lot of money on their accounts. So having a lots of cash stayed away also costs money to companies.
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Wait what? Maybe I've been wrong all my life, or maybe it works different here, but I was under the impression that having the amount of money in the bank would (slowly) increase, not decrease.
 

Holundrian

Member
Oct 25, 2017
9,159
sfedai0 said:
I think they will survive if the vaccine ends up being very effective. But they will end up filing for bankruptcy at this rate. If theyre lucky, they can negotiate with their creditors to keep all their theaters open in time for people to come back when its safe.
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If they're running out of cash by January I don't see how they will survive. That said I'm not familiar with the financial measures they could take.
I do know though that distributing the vaccine among the population is a task people are WILDLY underestimating when it comes to the timeframe it will take.
Like flatout if you're not working in the healthsector or work in a high risk environment don't expect to get your shot until 2022.
 
OnkelC

OnkelC

Member
Oct 27, 2017
1,177
BrickArts295 said:
d9fe947b12c52f77a5f558a8ea230d78.gif
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Bravo, good sir.
 
Castamere

Castamere

Member
Oct 26, 2017
3,517
platocplx said:
I just don't understand how these businesses are all run so poorly that they don't have enough money stashed away to survive more than a year with zero income. meanwhile if this were a regular citizen people would be like they don't need help or bailouts and it's their own fault. While companies get bailed out all the time.
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Most businesses are the same as the average citizen. Living "paycheck to paycheck". The reason a business gets bailed out is a business by closing can topple other businesses leading to a chain reaction that could stop many industries that feed into it or rely on it.

How would the popcorn Industry fair if every theater chain closed tomorrow? Or would Hollywood have to lay off thousands if they have to down scale their productions? Its all relative.
 
Joni

Joni

Member
Oct 27, 2017
19,508
Westbahnhof said:
Wait what? Maybe I've been wrong all my life, or maybe it works different here, but I was under the impression that having the amount of money in the bank would (slowly) increase, not decrease.
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Storing money on savings accounts isn't necessarily free for banks, they have to store excess money at their central banks and due to the 2008 recession measures these have turned negative in a lot of countries. So banks have to pay to store this money. They won't pass this on to you and me, because that is a PR disaster. But like, if you have a million on a savings account, you might end up paying 0.5% in interest. So even cash rich companies will often tie up their cash in other stuff like bonds, but even state bonds nowadays give negative interest. It also means you might have a lot of cash equivalents, but not have cash.
 
Sheng Long

Sheng Long

Moderator
Oct 27, 2017
7,590
Earth
There are no AMC theaters where I am, but if they went down, that's still really scary. I like the theater.
 
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Westbahnhof

Westbahnhof

The Fallen
Oct 27, 2017
10,108
Austria
Joni said:
Storing money on savings accounts isn't necessarily free for banks, they have to store excess money at their central banks and due to the 2008 recession measures these have turned negative in a lot of countries. So banks have to pay to store this money. They won't pass this on to you and me, because that is a PR disaster. But like, if you have a million on a savings account, you might end up paying 0.5% in interest. So even cash rich companies will often tie up their cash in other stuff like bonds, but even state bonds nowadays give negative interest. It also means you might have a lot of cash equivalents, but not have cash.
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I'm pretty sure that's not how it works over here, pretty sure multimillion savings still earn money. Gotta call up a bank to verify tomorrow.
 
Joni

Joni

Member
Oct 27, 2017
19,508
Westbahnhof said:
I'm pretty sure that's not how it works over here, pretty sure multimillion savings still earn money. Gotta call up a bank to verify tomorrow.
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Based on your profile, it should because we're all under the ECB. Potentially the lending sector is still large enough to offset the cost, but that would be a small chance.
www.reuters.com

How does negative interest rates policy work?

The European Central Bank doubled down on its negative rate policy on Thursday, meaning banks will now have to pay 0.5% interest simply for depositing much of their spare cash with it - an attempt to make them lend more to kickstart the economy.
www.reuters.com www.reuters.com

This presentation will show on slide 7 how much deposits are held on accounts with negative interest rates. Do note, the blue also includes 0 interest rates.
 
Shifty360

Shifty360

Alt-Account
Banned
Sep 3, 2020
818
Their Odeon cinemas in the Uk are trash, awful seats and completely overpriced.

I hope the cinema business survives but changes, an industry long past the need for updating its practices.
 
AlecKoKuTan

AlecKoKuTan

Member
Oct 29, 2017
2,256
Irvine, CA
In just So-Cal alone, there are so many of these fucking AMC Theaters. Close em the fuck down and keep a few of them, there's just too many of them and I doubt showing classic movies and fandom events is going to subsidize the sheer number of these things.

Unrelated but, I don't know why every theater doesn't have recliners, I personally stopped going theaters that didn't have em, all pre-pandemic too. I know our county spends a shit ton in the theater but most theaters here are absolutely trash. Especially if you consider the traffic you might have to deal with to get to one of the premium theaters.

Between the HBO fiasco, and Disneys Investors Call, super direct to consumer focused, all big theaters should be afraid.
 
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Taffy Lewis

Taffy Lewis

Member
Oct 27, 2017
1,527
SeanM said:
I'm definitely not knowledgable about financial decisions and market trends, but in my layman opinion I would view acquiring and renovating theaters as a solid long-term growth strategy.

Of course in hindsight it has bitten AMC in the ass. Now they have a thousand theater locations to pay massive rent on and like 40k employee salaries to pay while doing virtually no business. All I'm saying is that when they were spending all that money, they couldn't have ever predicted a pandemic would shut down their business for the better part of two years.
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Was AMC even doing well before this? I remember them being in trouble in 2019, but maybe I'm mixing up things. In general, movie theaters don't seem like a growth business even pre-pandemic.
 
Contraband

Contraband

Member
Nov 15, 2017
1,041
Hannah, Montana
AlecKoKuTan said:
Unrelated but, I don't know why every theater doesn't have recliners, I personally stopped going theaters that didn't have em, all pre-pandemic too. I know our county spends a shit ton in the theater but most theaters here are absolutely trash. Especially if you consider the traffic you might have to deal with to get to one of the premium theaters.
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Recliners reduce total occupancy because of the size of the seats. If you had an auditorium with let's say 200 normal seats you'd only be able to fit 80-100 recliners at best dependent on the layout of the auditorium.

Most AMC & Regal theatres that installed recliners installed them at sites that where struggling as a way to revitalize that market. Sites doing well would get IMAX, RPX, 4DX, Dolby Cinema, etc.
 
Advance.Wars.Sgt.

Advance.Wars.Sgt.

Member
Jun 10, 2018
8,847
SeanM said:
I'm definitely not knowledgable about financial decisions and market trends, but in my layman opinion I would view acquiring and renovating theaters as a solid long-term growth strategy.

Of course in hindsight it has bitten AMC in the ass. Now they have a thousand theater locations to pay massive rent on and like 40k employee salaries to pay while doing virtually no business. All I'm saying is that when they were spending all that money, they couldn't have ever predicted a pandemic would shut down their business for the better part of two years.
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Growth via large scale proliferation of physical outlets is a business model that belongs to a different era IMO, because now in the advent of digital consumption you're needlessly upping your operational costs for a shrinking upside.

Investing in bettering the theater experience and launching A-List, both of which are good decisions, have been completely undermined by their rapid expansion because those costs have been cutting into whatever their net take-home has been (which judging by their financial statements hasn't been much). Even as a long-term growth strategy, putting yourself over $3.5 billion in the hole when your primary business operates on the financial edge to begin with adds too much risk. And that's not even factoring the additional debt they took on to renovate and improve their theaters.
 
AlecKoKuTan

AlecKoKuTan

Member
Oct 29, 2017
2,256
Irvine, CA
Chris Contra said:
Recliners reduce total occupancy because of the size of the seats. If you had an auditorium with let's say 200 normal seats you'd only be able to fit 80-100 recliners at best dependent on the layout of the auditorium.

Most AMC & Regal theatres that installed recliners installed them at sites that where struggling as a way to revitalize that market. Sites doing well would get IMAX, RPX, 4DX, Dolby Cinema, etc.
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That's interesting, I'm just speaking anecdotally--but the big premium theaters I've gone to in LA always have recliners, serve alcohol with a full bar, IMAX screens....

So, I get a recliner is going to take up space, but are you selling that space where a recliner wouldn't be to begin with? Especially during the week day? My entire point in all of this was that there are too many theater locations to begin with, recliners or not.
 
SNRUB

SNRUB

Member
Oct 27, 2017
3,009
New Jersey
HStallion said:
Can Disney actually buy them? I believe there are issues with movie studios owning the actual movie theaters.
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They recently just reversed some 70-year old policy just last year:
www.hollywoodreporter.com

Justice Department Moves to Terminate Paramount Consent Decrees

The U.S. Department of Justice is moving to terminate the Paramount Consent Decrees, which have been in effect since the late 1940s and regulate how certain movie studios distribute films to theaters.
www.hollywoodreporter.com www.hollywoodreporter.com
 
Jakisthe

Jakisthe

Member
Oct 25, 2017
5,583
Godzilla's Left Toe said:
Viacom owns a small theater chain
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I'm not a lawyer, but with National Amusements, they owned less than 10% of Viacom, although they had over 70% (maybe up to 80%) of voting shares when they established control; furthermore, I also think the 1948 Paramount case said that it was movie distributors who couldn't buy theatres, less so the other way around.

EDIT: I goofed it and forgot that technically, Disney is not bound by the consent decrees.
 
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HStallion

HStallion

Banned
Oct 25, 2017
62,262
h1nch

h1nch

Member
Dec 12, 2017
1,908
Theaters really need to up their game. It seems like the vast, vast majority of theaters are extremely poorly run. Bad sound configuration, sticky floors, insane amount of commercials pre-show, stupid prices for low quality food/drink, etc. That's before you even factor in the trash behavior of other movie-goers.

Seriously theaters, do better. It's on you to earn my business back.
 
LuigiMario

LuigiMario

Member
Oct 28, 2017
3,938
h1nch said:
Theaters really need to up their game. It seems like the vast, vast majority of theaters are extremely poorly run. Bad sound configuration, sticky floors, insane amount of commercials pre-show, stupid prices for low quality food/drink, etc. That's before you even factor in the trash behavior of other movie-goers.

Seriously theaters, do better. It's on you to earn my business back.
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Smaller premium theaters with food/drink service is the path forward, kinda had been prior to COVID too, I think the trend will just be accelerated
 
OP
OP
Saucycarpdog

Saucycarpdog

Member
Oct 25, 2017
16,351
www.hollywoodreporter.com

AMC Theatres Eyes Selling Up to $124.75 Million in Stock

Cinema giant AMC Theatres has registered up to 50 million additional shares for sale, which could raise up to $124.75 million, as it looks for additional liquidity amid declining cash resources due to the coronavirus pandemic.
www.hollywoodreporter.com
Cinema giant AMC Theatres has registered up to 50 million additional shares for sale to raise up to $124.75 million to make it through the coronavirus pandemic.

In a Wednesday regulatory filing, the company said it could sell the shares of Class A common stock "from time to time" in addition to 200 million shares previously registered.

AMC Theatres mentioned a "proposed maximum offering price" of $2.50 per share, meaning the proposed maximum offering price would reach $124.75 million. It also listed a $13.6 million registration fee.
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It's a start I guess but I have no idea how they'll come up with another $625 million in a month.
 

Deleted member 21709

User requested account closure
Banned
Oct 28, 2017
23,310
Joni said:
www.fool.com

AMC Tells Its Landlords: We're Not Paying Rent Anymore | The Motley Fool

No tickets, no revenue. No revenue, no rent.
www.fool.com www.fool.com
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They don't give a fuck.

BringBackSonics said:
If amazon was smart they would buy AMC. Don't most AMC's own their buildings?
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Why would they buy AMC?

davepoobond said:
amazon will buy them all and convert them to distribution centers
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Of course.
 
davepoobond

davepoobond

Member
Oct 25, 2017
14,621
www.squackle.com
Saucycarpdog said:
www.hollywoodreporter.com

AMC Theatres Eyes Selling Up to $124.75 Million in Stock

Cinema giant AMC Theatres has registered up to 50 million additional shares for sale, which could raise up to $124.75 million, as it looks for additional liquidity amid declining cash resources due to the coronavirus pandemic.
www.hollywoodreporter.com
It's a start I guess but I have no idea how they'll come up with another $625 million in a month.
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amazon will buy them all and convert them to distribution centers
 
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