AMC Theatres CEO Gives Shout-Out to Redditors Who Boosted Stock: 'I Work for Them'
SAN FRANCISCO, CALIFORNIA- APRIL 06: A cyclist rides his bike by an AMC theatre during the coronavirus (COVID-19) pandemic on April 06, 2020 in San Francisco, California. The future of AMC movie theaters remains in question after shuttering all of its theaters and furloughing all 600 of its corporate staff including CEO Adam Aron. Residents in the San Francisco Bay Area are continuing to shelter in place due to the coronavirus. (Photo by Justin Sullivan/Getty Images)
AMC Theaters is still losing money as movie theaters around the world wait for more major blockbusters to arrive, but CEO Adam Aron was still very upbeat at Thursday’s earnings call, and the millions of Redditors and Robinhood traders that boosted his company’s stock earlier this year.
Aron said that over the past quarter, AMC has taken in approximately 3 million new shareholders thanks in large part to r/wallstreetbets, which picked AMC along with a few other companies like GameStop and Bed, Bath and Beyond as targets given their status as companies that hedge fund groups were short-selling.
As a result, AMC’s stock exploded overnight on Jan. 27 from around $5/share to just under $20/share, allowing the company to use the surging stock to lighten its debt load by approximately $600 million while day trading app Robinhood placed a brief freeze on stock purchases in companies targeted by Reddit users. Even now, AMC’s stock is above where it was during the COVID-19 pandemic at $9/share.
While the r/WallStreetBets phenomenon has been a media curiosity and has triggered a mad dash in Hollywood to turn it into documentaries and true-story dramas, Aron was earnest in his praise of his company’s new shareholders. While he did not mention the Reddit site by name, he did refer to them as AMC’s “vocal, enthusiastic and avid new shareholder base.”
“These individual investors likely own a majority of our shares, they own AMC. We work for them. I work for them. By definition, their interests and passions are important to AMC, their ambitions and passions are important to me,” he said.
As a token of appreciation, Aron announced that both he and AMC would each make a $50,000 donation to the Dian Fossey Gorilla Fund, a conservation fund dedicated to protecting endangered mountain gorillas. The campaign is a nod to r/WallStreetBets users’ references to themselves as “Apes,” sharing references to films like “King Kong” and “Rise of the Planet of the Apes” as they encourage each other to hang on to their shares in AMC despite any downturns.
AMC reported a loss of $567 million this past quarter, during which movie theaters began the slow process of reopening as the COVID-19 vaccination process began. Since then, with over 120 million people vaccinated in the U.S. and all of AMC’s locations among the 60% of theaters that have reopened nationwide, the chain has seen a slow increase in revenue over the past month thanks to films like “Godzilla vs. Kong,” “Mortal Kombat” and “Demon Slayer,” and hopes to see that increase escalate as summer blockbusters like “A Quiet Place — Part II,” “In the Heights” and “F9” become some of the first major blockbusters to hit theaters as the pandemic subsides in the U.S.
Source: Read Full Article