AMC shares plunge 30% after Cineworld’s bankruptcy warning

Shares of theater chain AMC plunged on Monday as rival Cineworld warned of potential bankruptcy.

AMC shares were down 30% on Monday morning, as the largest movie theater chain in the world built on a loss of more than 26% last week.

The drop comes as British company Cineworld, which owns Regal cinemas in the U.S., announced that a “voluntary Chapter 11 filing in the United States” was one of the options it was reviewing in an attempt to reduce its debt burden.

The Kansas based AMC also started trading its “APE units” on Monday.

“Remember, with the APE seeing its first trade on the NYSE at some time tomorrow morning, the value of your AMC investment will be the combination of your AMC shares and your new APE units. An AMC share plus a new APE unit added together — compared to just an AMC share previously,” AMC CEO Adam Aron wrote on Twitter on Sunday.

AMC reported more than $5 billion in long-term debt at the end of the second quarter. That total climbs to more than $10 billion when including lease obligations and other liabilities.

Last week, U.S. streaming passed cable TV viewing for the first time while box office remains well below its pre-pandemic levels.