AMC shares fall for a sixth straight session on Thursday, company to sell up to 15 million shares as it warns of potential liquidity issues in Q4

AMC Entertainment Holdings Inc (AMC) said in a SEC filing that it had reached an agreement with major banks to sell up to 15 million shares in an attempt to raise funds as it burns cash because of the coronavirus crisis.

Shares of AMC Entertainment Holdings closed lower for a sixth consecutive trading session in New York on Thursday. The stock went down 3.56% ($0.17) to $4.61, after touching an intraday low at $4.36, or a price level not seen since August 10th ($4.35).

Shares of AMC Entertainment Holdings Inc have retreated 36.33% so far this year, following another 41.04% drop in 2019.

The movie theater operator said that since major releases scheduled for the Thanksgiving and Christmas holidays had been delayed until 2021, its fourth-quarter liquidity would be considerably affected.

“…some states, including California, New York, Maryland, Michigan, North Carolina and Washington State, remain substantially or completely closed for theatrical exhibition as of September 14, 2020. As a result, studios have postponed new film releases or moved them to the home video market, and movie release dates may continue to move in the future,” AMC said in the filing.

Earlier this week Walt Disney delayed the release of “Black Widow” and Steven Spielberg’s “West Side Story” until 2021, while “Mulan” went directly to its streaming platform.

According to the filing, as of September 14th, AMC had reopened 461 theatres across the United States, with limited seating capacities of between 25% and 40%, which account for about 77% of its US locations.

Analyst stock price forecast and recommendation

According to CNN Money, the 7 analysts, offering 12-month forecasts regarding AMC Entertainment Holdings Inc’s stock price, have a median target of $4.50, with a high estimate of $7.00 and a low estimate of $1.00. The median estimate represents a 2.39% downside compared to the closing price of $4.61 on September 24th.

The same media also reported that at least 6 out of 9 surveyed investment analysts had rated AMC Entertainment Holdings Inc’s stock as “Hold”, while 3 – as “Sell”.