AMC Entertainment, the largest movie theater company in the United States, is facing challenges as it contemplates selling up to $250 million worth of its stock. The theater chain's decision was revealed in a filing with the Securities and Exchange Commission, causing the company's shares to plummet by about 15%.

The move comes as AMC grapples with poor box office revenue during the first fiscal quarter of 2024. The company attributed the disappointing results to last year's writers' and actors' strikes, which led to delays in major theatrical releases and a six-month shutdown of film and TV production.

In an effort to offset the financial impact of these setbacks, AMC Chief Executive Adam Aron has urged entertainment unions and Hollywood studios to resolve their labor disputes quickly, expressing concern about the collateral damage caused by extended work stoppages.

AMC Entertainment saw a glimmer of hope in 2023 thanks to popular concert films featuring Beyoncé and Taylor Swift, which boosted the company's revenue by 11.5%. However, increased seasonal working capital requirements and subsequent cash burn have further strained the exhibitor's financials, as indicated in the SEC filing.

The beginning of 2024 was particularly challenging for AMC and other cinema operators, with big-budget studio vehicles such as Sony Pictures' "Madame Web" and Apple's "Argylle" underperforming. This resulted in a 20% drop in domestic box office revenue compared to the previous year. While some titles like Paramount Pictures' "Bob Marley: One Love" and "Mean Girls" fared decently, the film slate remained relatively thin until the release of Warner Bros.' and Legendary's "Dune: Part Two" in March, which opened with over $80 million in the U.S. and Canada.

Unfortunately, the recovery of the exhibition industry from the impact of the COVID-19 pandemic was further hindered by the writers' and actors' strikes. As a result, several highly anticipated movies, including the eighth installment of Paramount's "Mission: Impossible" franchise and Disney's live-action remake of "Snow White," were pushed to 2025.

Looking ahead, analysts predict that full-year box office revenue for 2024 in the United States and Canada will range from $8 billion to $8.5 billion, signaling a decline from the $9 billion earned in 2023. Nevertheless, there are still anticipated releases in the pipeline such as Universal Pictures' "Wicked," Warner Bros.' "Furiosa: A Mad Max Saga," Paramount's "Gladiator 2," Sony's "Venom: The Last Dance," Amazon MGM's "Challengers," and Disney's "Deadpool & Wolverine."

As the movie industry continues to navigate the aftermath of a pandemic and two strikes, the future remains uncertain for theaters. AMC Entertainment's considerations for a stock sale reflect the challenges faced by one of the industry's leading players.