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AMC's stock soars 10% for its biggest gain since February

By James Rogers

CEO Adam Aron last week dismissed bankruptcy concerns

Shares of AMC Entertainment Holdings Inc. soared 10.1% on Tuesday, as the stock registered its biggest daily percentage gain since Feb. 6, when it rose 10.9%.

The stock, which surged on no apparent news, also snapped a four-day losing streak. Short interest as a percentage of AMC's public float of shares was 16.06%, according to the latest exchange data.

AMC shares (AMC) have hit a series of record lows recently, falling 55.6% in 2024. The stock is down more than 90% from its all-time closing high of $44.56, which occurred on June 2, 2021, during the meme-stock frenzy, according to Dow Jones Market Data. AMC shares were up 3.7% in extended trading Tuesday.

Last week, AMC Chief Executive Adam Aron said that chapter 11 bankruptcy is "inconceivable" for the movie-theater chain, despite the turmoil of the past few years.

Related: AMC CEO Adam Aron says 'it's inconceivable' that the movie-theater chain would file for chapter 11

The pandemic hit AMC hard, forcing the closure of movie theaters across the U.S. in March 2020. The company went from beleaguered pandemic victim to meme-stock phenomenon in 2021, and it continues to face speculation about possible bankruptcy. However, such speculation is wide of the mark, according to Aron.

"Personally, I think it's inconceivable that AMC would have to restructure like Regal Cinemas did and file for chapter 11," he told the Hollywood Reporter during an interview at CinemaCon in Las Vegas. "One of the things I'm very proud of is that going into the pandemic, AMC was in a very strong position."

The movie-theater chain is on a mission to tackle its debt load. In December, AMC completed an at-the-market equity offering, raising approximately $350 million as it attempts to reduce its debt burden.

Related: The future looks 'cautiously optimistic' for AMC, Benchmark says

AMC's total debt, including finance leases, at the end of 2023 was around $4.56 billion, down from $5.01 billion at the end of 2022, the company said in its fourth-quarter earnings release.

Last month, AMC filed to sell up to $250 million in stock. During the conference call to discuss AMC's fourth-quarter results, Aron highlighted the need for cash and pointed to the $418 million raised through the company's AMC preferred equity units, which were converted to common stock in August 2023. "There can be no argument, cash is king," he said.

In a note released last week, Benchmark analyst Mike Hickey highlighted AMC's debt burden but also pointed to the weapons in its arsenal. "With a significant $2 billion debt maturity looming in 2026, AMC benefits from having the largest Imax presence and potential growth in premium viewing formats," he wrote. "The future appears cautiously optimistic as the cinema sector prepares for upcoming blockbuster releases."

Related: AMC CEO says domestic box office has 'finally turned upwards'

Although AMC has faced bankruptcy speculation, Hickey said, "an immediate collapse is deemed unlikely."

-James Rogers

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.


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04-16-24 1828ET

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