AMC Entertainment The stock fell 2% today and 15% this week to set a new split-adjusted all-time low of $5.17.
It's a notable turnaround after the unlikely boost provided in 2020 by meme-happy individual investors who built positions even as movie theaters were closed due to Covid.
Some shareholders have recently expressed concern about the challenges facing the number one cinema circuit in what is shaping up to be a daunting year for the box office. The overall release slate now includes far fewer major titles than last year due to factors such as the 2023 double strike and continued uncertainty over film releases post-pandemic.
Added to these operational problems is the specter of dilution linked to the issuance of new shares by the company in order to repay its debt. In the most recent case, earlier this week, the exhibitor said it had issued more than 3.25 million Class A shares in exchange for $22.5 million, which it plans to use to repay notes due in 2026.
The concern among some investors is that increased stock volume is limiting buy-side demand and diluting the value of all stocks, although many investors on Wall Street have indicated they fully expect this that AMC continues to use stock exchanges. In the filing this week, the company said it “may engage in similar transactions in the future, but is not required to do so.”
Last November, despite strong third-quarter financial results and Hollywood's optimism that the SAG-AFTRA strike would end, AMC Entertainment Stock dived after the company announced plans to raise up to $350 million through stock sales.
AMC Entertainment will report its fourth quarter results in the coming weeks. Across the sector, the holiday quarter was a bit lackluster, especially compared to the comparable 2022 framework and flagship stocks like Avatar: The Way of Water.