AMC Shares Soar After Filing Revised Stock Conversion Plan, Blockbuster Weekend

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KEY TAKEAWAYS

• AMC theaters had the best weekend in four years as "Barbie" and "Oppenheimer" drew big crowds.
• AMC filed a revised stock conversion proposal after a judge ruled against a settlement relating to AMC's stock-conversion plan on Friday.
• CEO Adam Aron said it's "critical" that the company raise cash.

AMC Entertainment Holdings (AMC) shares skyrocketed over 27% Monday morning after the theater chain filed a revised stock conversion proposal, and the releases of Barbie and Oppenheimer drew large crowds over the weekend.

AMC reported the two summer blockbuster movies helped it post its largest attendance and box office weekend since 2019. In addition, AMC’s food and beverage sales on Saturday hit the second-highest one-day total in history.

The company also filed a revised stock conversion proposal after a Delaware judge Friday struck down the company’s decision to convert AMC preferred equity shares (APE) into regular AMC shares in an effort to raise capital.

On Sunday, CEO Adam Aron wrote an open letter to shareholders, warning that raising fresh equity in the near term “is critical to the company.” He said without it, AMC risks running out of cash next year or the year after or may be unable to satisfactorily refinance and stretch out its debt.3

Following the losses incurred during the COVID-19 pandemic, Aron said he has been driven by one overarching goal of keeping AMC from “financial ruin.” He indicated the only way to do that is to bring in more money. Now is a critical moment with the strikes by actors and writers possibly delaying the release of new films in 2024 and 2025, he added.

While a large majority of investors voted in favor of the stock conversion proposal in March, several thousand filed a lawsuit to block it, fearing further delusion of AMC shares. An agreement was worked out between the parties, but Delaware Chancery Court Vice Chancellor Morgan Zurn rejected it.

Aron noted the company and plaintiffs have entered “a modification of the legal release surrounding the settlement of the Delaware litigation in an effort to address the Court’s voiced concern.”