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AMC Theatres’ stock is a Reddit fave. Why its CEO is embracing the meme and a gorilla charity

AMC Theatres CEO Adam Aron talks to investors
AMC Theatres CEO Adam Aron on Thursday heralded the company’s legion of individual investors Thursday.
(Matt Rourke / Associated Press)

Not many chief executives take time in a quarterly earnings call to tout a 90-minute interview they did with a YouTube channel for stock traders. But most CEOs aren’t Adam Aron, the Winston Churchill-quoting head of AMC Theatres.

The world’s largest movie theater became a favorite stock of social media-savvy retail investors earlier this year when it looked like the Leawood, Kan.-based exhibitor might again be on its last legs.

Investors, many of whom were inspired by Reddit forum WallStreetBets, piled into the stock on a mission to squeeze short sellers and “save AMC.” The shares jumped from around $2 to a peak of more than $20. AMC’s stock rose 6% to $9.51 on Thursday.

AMC, which was facing a cash crunch after nearly a year of theater closures due to the COVID-19 pandemic, sold tens of millions of shares amid the rally to improve its balance sheet.

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Aron, speaking during the company’s first-quarter earnings call, heaped praise on the company’s new retail investors, who number roughly 3.2 million as of March 11, mostly in North America and Europe.

“Just go on Twitter, just go on Reddit, just go on YouTube, read what these people write,” Aron told analysts. “They love AMC. And these are not people who are just going to be investors in AMC. These are going to be customers of AMC who come to our theaters and enjoy watching movies at our theaters as paying guests. So I love the idea that we have a passionate, committed, enthusiastic shareholder base.”

And AMC needs customers. As Aron acknowledged, even with almost all of AMC’s locations reopened, the recovery of theatrical exhibition business has not yet truly begun. AMC lost $567 million in the quarter that ended March 31, on revenue that fell 84% year-over-year to $148.3 million.

The optimism of AMC’s new investors flies in the face of skeptics who worry about AMC’s heavy debt load and uncertainty about the return of moviegoers after the pandemic. It remains to be seen whether upcoming movies including “In the Heights,” “Black Widow” and “F9" will bring patrons back to theaters in droves. Meanwhile, the Hollywood studios are channeling much of their energies into streaming services.

Other than Frances McDormand, was anyone in Hollywood interested in standing up for movie theaters in their hour of need?

Social media users cheered Aron’s comments. But AMC’s embrace of its memestock status is about more than customer enthusiasm and having a longer capital runway. The company now has millions of vocal new investors to answer to.

China’s Dalian Wanda Group remains AMC’s largest individual shareholder. However, as disclosed in March, the Beijing-based conglomerate gave up control of AMC when its stake fell below 10% of AMC shares.

Four-fifths of AMC’s outstanding 450 million shares is now held by individuals, said Aron, who describes the retail investor surge as a “change of control” from Wanda “to a shareholder base, primarily individual shareholders.”

“If management thinks something and the owners of our business think something else, in the free market system guess who wins?” Aron said. “Guess who always wins? The owners of the business, because the managements work for the owners.”

In another nod to the online investors, Aron announced that AMC would donate $50,000 to the Dian Fossey Gorilla Fund, an amount Aron pledged to match personally. The conservationist nonprofit organization’s namesake Fossey, who worked to save gorillas in Central Africa, was portrayed by Sigourney Weaver in the 1988 film “Gorillas in the Mist.”

The fund is a favorite of WallStreetBets, members of which in March reportedly adopted 3,500 gorillas in six days. The group received $350,000 in donations.

Aron, an infrequent tweeter until recently, has become more active on social media, recently sharing a video of an airplane carrying a banner that read "$AMC to the moon,” a rallying cry for Reddit traders. On Thursday, Aron touted his 90-minute interview on YouTube channel “Trey’s Trades,” which has about 260,000 views.

“Some of you may have seen a YouTube interview that I did,” Aron said. “Try getting four minutes on CNBC. That’s pretty hard. Well, we got 90 minutes on YouTube and it had 250,000 views.... It’s going to change the way we communicate and it’s going to change who we communicate too, but I’m very confident that the outcome will have a happy ending.”


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