Shares of AMC Entertainment ( AMC 3.64% ) have fallen today, down by 6% as of 1:15 p.m. EST, as investors continued to fret about the decision by AT&T's ( T 3.17% ) WarnerMedia segment to stream Warner Bros. movies in 2021 simultaneously alongside theatrical debuts. AMC also filed a shelf registration statement with the Securities and Exchange Commission that will allow it to raise cash.
Warner Bros. said yesterday that it would adopt a new hybrid distribution model in response to the pandemic. The company plans to release its 2021 lineup, which will include a Suicide Squad sequel and Dune, on HBO Max.
I got you something ✨nice✨ this year:— Warner Bros. Pictures (@wbpictures) December 3, 2020
🎁 The biggest movie premieres
🎁 In theaters and on HBO Max the exact same day
🎁 Beginning December 25 with #WonderWoman1984#HBOMax #WBPictureshttps://t.co/QA8MlErRYQ pic.twitter.com/VuYkTa6BGx
In response, AMC Entertainment CEO Adam Aron released a blistering statement (via The Hollywood Reporter), vowing to "aggressively pursue economic terms that preserve our business." Aron further criticized the move in light of progress being made with COVID-19 vaccines, which should help the retail theater industry recover. He said that Warner Bros. would be sacrificing profitability in order to "subsidize its HBO Max start-up."
AMC had warned in October that it could run out of cash as early as the end of 2020 or early 2021. Revenue has dried up due to the pandemic, with sales falling 91% in the third quarter. The shelf registration statement will allow AMC to sell 200 million shares, raising up to $844 million that could potentially serve as a financial lifeline.