The big picture: Businesses that cater to large groups of people were arguably hit the hardest during the pandemic and AMC is no exception. The chain theater operator this week released preliminary results for the first quarter ending March 31, 2020, and it isn’t looking good. AMC said it is expecting a net loss of between $2.1 billion and $2.4 billion. In comparison, AMC lost just $130.2 million during the same three-month period in 2019.

AMC has been struggling for a while now but appeared to have found some traction in recent memory with its Stubs A-List subscription service. When the pandemic hit and the company was forced to close down all of its theaters in the US, that momentum went out the window.

In a filing with the SEC this week, AMC said it believes they have the cash resources to reopen theaters and resume operations this summer or later.

We cannot assure you that our assumptions used to estimate our liquidity requirements will be correct because we have never previously experienced a complete cessation of our operations, and as a consequence, our ability to be predictive is uncertain. If we do not recommence operations within our estimated timeline, we will require additional capital and may also require additional financing if, for example, our operations do not generate the expected revenues or a recurrence of COVID-19 were to cause another suspension of operations. Such additional financing may not be available on favorable terms or at all. Due to these factors, substantial doubt exists about our ability to continue as a going concern for a reasonable period of time.

In other words, if things don’t improve, AMC may be forced into bankruptcy.

Worse yet, the matter is likely only going to get worse in the second quarter. AMC shut down its theaters in mid-March and plans to keep them closed through June at the earliest. That'll be a full quarter in which AMC will generate "effectively no revenue."

AMC is expected to share its full earnings report on June 9.

Masthead credit: Syda Productions