It wasn't until the December release of Sony's "Spider-Man: No Way Home" that the movie theater business saw some semblance of normalcy, and that feat won't be easily repeated until at least the second quarter of 2022, industry analysts say.Īdditionally, despite warnings that Aron and other executives had plans to reduce their AMC holdings, some investors became disillusioned. Children age 5 to 11 weren't approved for the Covid vaccine until late October, and those under 5 years old still aren't eligible. And some parents are staying home as well. Older audiences have remained wary of returning to cinemas. But new coronavirus variants - first delta, then omicron - have dampened the industry's rally. 1, 2021, each generated more than $200 million in ticket sales during their theatrical runs. Major titles like Disney's "Shang-Chi and the Legend of the Ten Rings," in September 2021, and Warner Bros.' "Venom: Let There Be Carnage," released Oct. The domestic box office had begun to recover. ![]() In the second half of last year, the shares averaged $40. ![]() Wooing the 'apes'Įven with these staunch supporters, some of the air came out of AMC's stock. This debt reduction reduced AMC's annual interest costs by $5.25 million. The company was also able to repurchase around $35 million of first lien debt in September, which cost $41.3 million, including principal and accrued and unpaid interest. On June 3, AMC sold another 11 million shares, this time at $50.85 each, generating nearly $600 million in fresh capital. The next day, retail investors once again poured into AMC stock. The equity was issued at a price of about $27.12 per share. Then on June 1, AMC struck another deal with Mudrick Capital Management to exchange 8.5 million shares of the company for $230.5 million in cash. Following this cash infusion, shares of the company jumped to around $25 - an unusual reaction to such news. On May 13, AMC sold 43 million shares at just under $10 apiece, raising $428 million. The new investors quickly became AMC's majority stakeholders and continued to back the stock, allowing Aron to make some strategic stock sales in May and June to fill up AMC's coffers. Those that did were often released on streaming platforms on the same day.Īdditionally, while the majority of AMC's theaters were reopened to the public, local governments had implemented seating caps of between 15% and 60%, greatly limiting the number of tickets the theater could sell. Vaccines were not yet widely available, and few blockbuster films were coming to the big screen. Movie theaters had been shuttered for months, and when they reopened, new waves of Covid-19 cases kept audiences home. Hedge funds had been betting against AMC's stock because its troubles were well known. GameStop and Bed Bath and Beyond were among the other stocks bolstered by the trend at that time. Emboldened by fellow members of the Reddit community, these new investors began targeting stocks that were heavily shorted, hoping to cause losses for the hedge funds that had bet against the beat-up stocks. Meanwhile, its new investor base may be fracturing, with some shareholders having unrealistic expectations for AMC's growth, while others leave it behind.Ī rise in investing apps like Robinhood allowed retail investors to trade stocks more easily and with little to no commission fees. The movie theater industry has yet to fully recover from the ongoing global pandemic. With more secure footing, AMC can focus on shoring up its balance sheet, reducing its debt load and interest expenses and expanding its content and concession offerings. ![]() "He could then sell enough stock to give AMC enough cash to survive." "Adam Aron got a huge gift with these retail investors," said Eric Handler, media and entertainment analyst at MKM Partners. Riley Securities.Īs retail investors hoisted the company's shares to new highs, Aron made strategic stock sales and amassed a $2 billion "war chest" that could be used to invest in theater upgrades and new cinema leases. "Of all the meme stocks, AMC seems to be the smartest firm to take advantage and recognize the opportunity there," said Eric Wold, senior analyst at B. ![]() Personal Loans for 670 Credit Score or LowerĮven though shares closed Tuesday at $16.02, AMC is in a better position in 2022 because of the support this new wave of investors and the opportunistic actions of its CEO Adam Aron. Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit
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