Wall Street analysts are seeing a Chapter 11 bankruptcy filing from cinema giant AMC Theatres as increasingly likely. MKM Partners analyst Eric Handler last Thursday downgraded his rating on shares of the exhibitor from “neutral” to “sell,” saying that “bankruptcy appears likely.”
That followed Loop Capital analyst Alan Gould’s Wednesday downgrade to a “sell” in a report that concluded: “We think bankruptcy is a distinct possibility, and at a minimum, the company will require a highly-dilutive financing.”
AMC, in which Chinese conglomerate Dalian Wanda Group owns a majority voting stake, has been looking for various ways to reduce costs, in late March furloughing all of its 600 corporate employees, including CEO Adam Aron, following the closure of all its cinemas. It had earlier already cut its dividend by 85 percent.