Shares of AMC Entertainment Holdings Inc. are experiencing a significant decrease, with a decline of 6.6% on Wednesday. The stock is currently trading at around $5.71, approaching another record low close.
According to Dow Jones market data, the previous record closing low for AMC was $6.07, set on December 21, 2023. This decline in share price marks a significant contrast to its previous success as a meme stock, when it achieved an all-time high closing price of $339.05 on June 2, 2021.
From Pandemic Victim to Meme Stock Phenomenon
Three years ago, AMC Entertainment transitioned from being a pandemic-battered business to a meme stock phenomenon. The enthusiastic support from the WallStreetBets community on Reddit fueled a rapid increase in AMC’s share price. Capitalizing on this momentum, the company successfully raised $917 million in January 2021 through equity and debt markets.
Efforts to Alleviate Debt Burden
Following its surge in popularity and capital injection, AMC has prioritized addressing its mounting debt burden. In 2022, the company’s debt exceeded $5 billion. To combat this challenge, AMC introduced its APE special dividend and completed the conversion of APEs into AMC common stock in 2023. Additionally, there was a reverse 1-for-10 split of common stock.
Last December, AMC successfully raised approximately $350 million through its latest at-the-market equity offering. This action reflects the company’s ongoing commitment to reducing its debt burden.
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AMC: Moving Beyond Meme Status
By Alicia Reese, VP of Equity Research at Wedbush
AMC, once a prominent meme stock, has experienced a significant shift in its status, according to Alicia Reese, an expert in equity research. Over the past several months, especially since its APE fold-in and reverse stock split, the company’s share price has plummeted back to reality.
The recent success of concert movies featuring renowned artists like Beyoncé and Taylor Swift has helped AMC regain momentum. In fact, “Taylor Swift: The Eras Tour” shattered records following its premiere on October 12. During a conference call discussing AMC’s third-quarter results, CEO Aron emphasized that the success of Taylor Swift and Beyoncé’s movies opens doors for other concert films at AMC.
On New Year’s Eve, AMC CEO Adam Aron took to X (formerly known as Twitter) to express his disdain for the “prophets of doom” who predicted the company’s demise in 2023. Defending the company’s resilience and ever-evolving nature, Aron proudly declared that AMC is here to stay and will continue to blaze new trails.
Despite these recent developments, AMC’s stock has experienced an 84.1% decline over the past year, in stark contrast to the S&P 500 index’s impressive gain of 22.3%.
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