AMC Entertainment shares dropped more than 20% today after a new analyst downgrade. B. Riley FBR analyst Eric Wold downgraded AMC's stock to sell, causing the shares to plummet this morning. This is just the latest bad news for the theater chain after it was reported over the weekend that AMC Theatres are looking to file Chapter 11 bankruptcy. Theaters all over North America have been closed since the middle of March and it's unclear when they'll be able to open again.

AMC has seen its shares drop nearly 10% in the last five days. They've dropped more than 36% in the last month and close to 72% in the last year. Things are not looking good for the chain at the moment, especially with the bankruptcy news, which is what started the stock downgrade today. Eric Wold had this to say in a letter to clients.

"We continue to believe that AMC has minimal liquidity options to make it through an extended theatrical shutdown period even with the recently reported decision to no longer pay rent on its theaters. While we were clearly on the wrong side of the trade by maintaining a Buy rating up to the initial downgrade on March 18, we no longer see value in maintaining positions in AMC shares at this point."

Though Eric Wold downgraded AMC's stock, he still believes there's more that could be done to save the company. Cinemark just announced the sale of $2.5 million in senior secure notes in an effort to keep some cash flow moving. AMC currently has no real money coming in from anywhere, even after furloughing over 24,000 employees. Wold explains.

"We acknowledge there remain numerous uncertainties that continue to loom over the exhibition industry, including when theaters will be allowed to reopen to the public; what the film slate will look like given most high-profile films have been pushed; and how initial movie-going demand will develop and/or what government restrictions on attendance levels will be put into place. With that in mind, we believe that it makes sense for exhibitors to explore all options to help keep the company afloat and around for the industry restart."

Sources say a Chapter 11 bankruptcy would not be the worst thing for AMC's current market value. However, there is the chance that this filing could result in a massive sell-off, which could lead to Chapter 7 bankruptcy. If it gets that far, AMC's current shares would be pretty much worthless. AMC has a lot to consider at the moment and will have to be very careful with their next steps.

Eric Wold believes it to be unlikely that AMC will be able to find other credit sources at this time, especially since their overall credit rating was just downgraded to CCC-. This brings the chain's credit from "highly speculative" to "default imminent, with little prospect for recovery." It's going to be very interesting to see where AMC is able to go from here. The world is in a tough spot at the moment and people are hoping for some return to normalcy soon, along with theater chains. The Hollywood Reporter was one of the first to announce AMC's stock drop.