AMC Theatres is rewarding the retail investors who rallied to support the exhibition giant when it was laboring under debt and COVID closures, lifting its share price at a critical juncture.
On Thursday, the company announced that it will give a special dividend to investors of one AMC preferred equity unit for each of AMC Class A common stock. With a wink and a nod, the company plans to list these units on the New York Stock Exchange under the symbol “APE,” the preferred moniker of the shareholders who embraced the AMC cause when it teetered on the brink of insolvency.
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The announcement came as AMC narrowed its quarterly loss on Thursday as summer blockbusters like “Top Gun: Maverick” and “Jurassic World Dominion” lifted earnings. Net losses for the three-month period ending June 30 improved to $121.6 million, or 24 cents per share, compared to a net loss of $344 million, or 71 cents per share, for the second quarter of 2021. Total revenue climbed to $1.2 billion, up from $444.7 million in the prior-year quarter. But that revenue number missed Wall Street’s expectations by $20 million, as did the size of its losses.
Lured by hits such as “Elvis” and “Doctor Strange in the Multiverse of Madness,” attendance topped out at 59 million, a dramatic jump from the 22 million people who visited AMC in the year-ago period.
“AMC just completed a spectacularly encouraging second quarter that boosts our mood and brightens our prospects as we look ahead,” Adam Aron, AMC Entertainment chairman and CEO, said in a statement.
And yet Wall Street didn’t seem as enthused. AMC’s shares were down more than 7% in after-hours trading.
Aron said that AMC’s $28 million stake in Hycroft Mining resulted in write downs on gains due to share price volatility. But the AMC chief predicted the unorthodox investment in a silver and gold mining company that seems far removed from the company’s core competency in selling movie tickets and popcorn, would pay off.
“In fact, Hycroft just announced it would commence its largest drilling exploration program in nearly a decade, and we have every confidence that over time our investment in Hycroft will pan out to be golden,” Aron said.
AMC boasts cash on-hand of $965.2 million, but continues to carry a heavy debt load of more than $5 billion. And yet Aron continues to argue that AMC is in growth mode and he has come to relish his role as the darling of social media investors. On an earnings call, Aron answered questions from rank-and-file shareholders, along with those of analysts, and touted a complimentary NFT he was giving to investors. He also talked about the special screenings that AMC has been holding for its stakeholders, at which Aron says he poses for selfies and was even asked to sign a banana (another ape reference) by one attendee. The result is a company that has embraced a new brand of corporate populism even as it touts the potential in a form of media that has been around for more than a century. At the very least, it makes for a colorful earnings presentation.
On the call, Aron made news by announcing that Nicole Kidman, who starred in a viral AMC spot, has extended her deal as the public face of the theater chain for another year. Her initial ad, in which Kidman rhapsodizes about how AMC is a place for magic, was parodied, memed and inspired an array of Change.org petitions.
The AMC chief acknowledged that the third quarter, which is filled with smaller films and awards hopefuls, won’t be as robust. “It is going to be a tough August and September,” Aron said. However, he predicted that fortunes will change with the November release of “Black Panther: Wakanda Forever” and the December debut of “Avatar: The Way of Water.”
“It’s going to be monster hit after monster hit after monster hit,” Aron boldly stated.
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