AMC Entertainment
has been trading wildly this year, just like it did during the height of the meme-stock era. The stock on Thursday was doing more of the same, trading sharply lower on the back of its earnings report with CEO Adam Aron acknowledging the volatility.
“I am a shareholder. I am holding. I’m not selling. I ride with you. So when you get well financially with
AMC,
I will too,” Aron said on company’s earnings call Wednesday. “But if you’re hurting from that investment, I believe that I too should be hurting with you as well.”
“Therefore, to prove that these words are not hollow and to show executive leadership from someone who is in your foxhole, I want you to know that I recommended last week to the AMC Board of Directors that for the next 12 months, starting right now, my target compensation should be substantially reduced,” he added.
The movie-theater chain stock was down 11% to $4.43 on Thursday. The stock decline seems to be less about the quarterly financial metrics and more about the slew of challenges the company continues to face, namely a pile of debt and the echoes of strikes that Aron said “crippled Hollywood for months on end.”
Wedbush analysts Alicia Reese and Michael Pachter offered some insight around that debt in a report on Thursday.
“AMC raised over $865 million from equity sales in 2023 ($350 in Q4) and will continue to do so as the box office slate remains depressed through 1H:24,” Wedbush wrote. “AMC’s shareholders continue to resist AMC’s share repurchases, but AMC must cover its interest payments and leases while chipping away at the $3 billion in debt repayments coming due over the next three years while renegotiating the rest.” Wedbush rates AMC at Neutral with a price target of $6.
The box office has taken a punch from the Hollywood strikes but Aron said “things will pick up considerably soon and then again later in 2024 and 2025, which in the grand scheme of things is right around the corner, could be a gangbusters year both for our industry and for AMC as a company.”
B. Riley Securities analyst Eric Wold struck a similar tone, writing that the strikes may create challenges this year but that the box office will rebound in 2025 and AMC will more than deliver on attendance growth and customer spending. B. Riley cut its price target to $8 from $12 but reiterated a Neutral rating in a research report.
AMC on Wednesday reported a fourth-quarter adjusted per-share loss of 54 cents, narrower than the loss of 70 cents expected by analysts. Revenue of $1.1 billion topped estimates of $1.06 billion, according to FactSet. Concert films Taylor Swift: The Eras Tour and Renaissance: A Film by Beyoncé gave a healthy boost to quarterly revenue, AMC said.
Write to Emily Dattilo at [email protected]
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