Photo by Donreál Lunkin on Unsplash
AMC Hits Record Low and Struggles To Improve
January 5, 2024
AMC Entertainment Holdings Inc.’s stock is plummeting. The company’s shares marked a record low yet again this Thursday, closing at a meager $5.30, down by 5%. This marks the fourth day in a row of losses for the movie theater chain. The last time the stock saw this level of decline was a five-day losing streak that wrapped up on Nov. 13, 2023.
Just the day prior, AMC’s stock had closed at an all-time low of $5.58. That easily undercut the previous record low stock price of $6.07 established on Dec. 21, 2023. To put this into perspective, the company’s stock once enjoyed an all-time high of $339.05 back on June 2, 2021, during its “meme-stock” glory days.
Last Tuesday, AMC revealed that it has initiated a series of privately negotiated exchanges. In these deals, the company issued more than 3.2 million shares of Class A common stock, which were exchanged for $22.5 million of its notes due in 2026. The shares issued in this operation were valued at $6.94 each. The company has stated that such exchanges might happen again but isn’t obligated to follow through.
This is one of AMC’s recent moves to manage its hefty debt, which exceeded $5 billion in 2022. To deal with this, the company introduced the APE special dividend in the same year and converted the APEs into AMC common stock in 2023. They also executed a reverse 1-for-10 split of common stock.
In a similar vein, the company raised approximately $350 million in December, thanks to its latest at-the-market equity offering. However, despite these efforts, AMC’s CEO, Adam Aron, has constantly reminded the public and shareholders about the company’s ongoing financial struggles. The company’s financial woes are evident in its stock’s performance over the past year. AMC shares have plummeted by a whopping 84.8%, while the S&P 500 index has seen a gain of 23.1%. Among seven analysts surveyed by FactSet, four advised holding AMC’s stock, while three recommended selling it.
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