Shares of top movie theater operator AMC Entertainment fell 7% in early trading this morning after the company revealed a plan to sell up to 50,000 shares of stock.
In an SEC filing, the company said it would use proceeds from the share sale “to strengthen the company’s balance sheet and reinvest in the company’s core business.” It also cited the “GO Plan” (short for “go on offense”) announced last month by CEO Adam Aron, saying funds from the share sale would help pay for “seating, sight and sound enhancements, including an increase in the number of branded premium large format screens.”
Bolstering liquidity and “repaying, redeeming or refinancing the company’s existing debt” are additional priorities.
The terms “$AMC” and “Adam Aron” started trending soon after the filing emerged. Aron, who has led the company through an epic series of ups and downs through a debt crisis, the catastrophe of Covid, the meme-stock and short-squeeze mania of 2020 and 2021, has largely been viewed as a folk hero. The company, which counted China’s Wanda Group and hedge fund Silver Lake as major shareholders in past years, has been controlled by individual investors since 2021.
Many of them reacted with anger on Friday, fearing their positions would be diluted by the share sale, or airing other theories about the motivation for the transaction. One typical post came from Matt Kohrs, a popular YouTuber with 143 million followers on X, formerly Twitter. Deployed the online sarcasm of mixing upper- and lower-case letters to emphasize his point, he wrote, “AdAm ArOn Is On OuR sIdE. #AMC is doomed to fail.” Others lamented the “momentum-killing” effect after a record-setting Thanksgiving period for AMC and other theater chains.
A new post Thursday by investor Keith Gill, aka Roaring Kitty, only added to the online upheaval. Gill, who gained fame by helping to start the meme-stock frenzy involving AMC and GameStop, posted to his 1.6 million followers on X, formerly Twitter, a version of Time magazine’s 2006 Person of the Year cover. The cover famously named “You” (the public) person of the year because of its newfound agency on then-nascent digital platforms like YouTube. Gill’s post boosted GameStop, AMC and others on Thursday.
Shares in AMC have fallen 21% in 2024 to date.
