AMC Entertainment saw its shares rise more than 4% on Wednesday, which indicates the company may not be headed toward bankruptcy after all.
What’s the news:
- AMC Entertainment’s shares jumped 4.4% Wednesday morning.
- MKM Partners analyst Eric Handler said the movie theater chain’s risk of bankruptcy has “lessened considerably.” He changed his suggestion to sell stock in the company to neutral, according to MarketWatch.
- The bankruptcy risk dropped since it appears likely that the United States and Europe will reopen theaters in July for the Hollywood summer blockbuster season, MarketWatch reports.
- Handler wrote in a note: “We are still concerned about AMC’s net leverage and absolute level of debt, but believe with the expected reopening of the company’s circuit within the next two months there is sufficient cash on hand to get through the end of the year.”
- AMC’s stock dropped as low of $2.08 because of the coronavirus pandemic. Reports suggested Amazon was interested in buying AMC. However, there was no official confirmation from either side that talks took place.
- Analysts told Deadline that a merger between the two sides seemed unlikely.
- “We would be surprised if an acquisition down near all-time lows by Amazon in a transaction that would more than likely be for cash (and not stock) would appeal to AMC’s major shareholders,” said Eric Wold, an analyst with B. Riley FBR.