AMC Entertainment Holdings (AMC) – AMC must continue to do this for shareholders, says CEO, dismissing similar bankruptcy concerns at Cineworld

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AMC Entertainment Holdings, Inc. CMA has lost around 70% since the start of the year, with the weakness attributed to general market sentiment and the ‘stonk’ phenomenon losing its luster.

What happened: An industry-specific development can also weigh on sentiment. A Wall Street Journal report said in mid-August that the owner of Regal Cinemas Cineworld Group plcCNNWF is considering filing for bankruptcy protection.

AMC CEO Adam Aron took to Twitter to allay investor concerns over the theater chain’s fundamentals after its stock fell 7.77% to $8.19 on Tuesday.

Aron said AMC is “very different”. The company ended the June quarter with more than $1 billion in cash, he noted. Additionally, the company is able to easily raise equity, he added.

“The best thing AMC can do for our shareholders is to continue to have ample liquidity,” the AMC CEO said.

See also: “Jaws” to the rescue: $3 movie ticket promotion boosts attendance at AMC and others, led by older titles

Why it matters: AMC announced in early August that its second-quarter revenue more than doubled from a year ago as the world was still grappling with COVID-19. Despite improved footfall and revenue, the company posted a bigger than expected loss for the quarter.

Aaron’s statement that the company can easily raise equity comes amid growing shareholder dissatisfaction with the breakneck pace at which it is selling shares to raise cash. Sensing the mood, in mid-2021 AMC withdrew a proposal to increase outstanding shares that would have allowed it to sell more shares.

AMC’s decision to issue preferred stock, which recently began trading on the NYSE under the symbol APE, is seen as a way to circumvent shareholder resistance to stock sales.

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