Last week marked the one-year anniversary of AMC’s Reddit Rally, the miraculous rebound in the share price of the world’s largest exhibitor. At the time AMC was teetering on the edge of bankruptcy, struggling to keep theatres open during the height of the pandemic. It was also weighed down by more than $5B in debt, built up during an aggressive multi-year campaign to expand by acquiring rival chains. Most analysts expected AMC’s way forward would involve bankruptcy, allowing the exhibitor to shed much of that debt and renegotiate lease terms and other obligations.
Even while the buzzards circled, a legion of retail investors took interest in AMC, with a #SaveAMC campaign catching fire with individual investors, making AMC an unlikely hot stock on message boards such as Reddit’s WallStreetBets. CEO Adam Aron capitalized on the surge in the company’s stock price to issue new shares to eager investors, as a way to bring in new funds to sustain operations and pay down some of its debts.
But after hitting a peak of $70 per share in June, AMC stock has now settled back to a more sober $16. This week, the Wall Street Journal reported that AMC is in talks with creditors to renegotiate the rates and terms on some of its debts, while projecting healthy revenues based on a recovery of the box office in 2022 and beyond.
See also: How AMC rode the meme stock rally to revitalize its business (CNBC)