But since AMC split into two stocks, the combined value of AMC and APE is hovering near $ 14. (AMC is trading for around $ 8.60 and APE is at about $ 5.20) Do the math and that’s a nearly 25% drop in just the past few weeks. The price of one AMC plus one APE share is also about 50% below where AMC’s stock began 2022.
What’s the problem? It seems no amount of promotional hype from AMC CEO Adam Aron can overcome the fact that the economics for theaters are terrible – no matter how often he notes how much cooler AMC is than other theaters and how it has this army of loyal individual investors.
“Cineworld / Regal just filed for Chapter 11 bankruptcy protection for its theaters in the USand UK Fortunately, AMC is in a very, very different situation – because retail investors embraced us and let us raise boatloads of cash. Thank you to retail! You really did save AMC, “Aron wrote.
Movie fans also seem willing to go to theaters for truly big blockbuster film events like the long-awaited “Top Gun” sequel, the latest in the Jurassic World and Marvel franchises or animated fare for the kids. The box office in the US has rebounded from the depths of 2020 and 2021.
Add all that up and it’s not hard to see why AMC remains in a somewhat precarious financial position. The company is expected to report a loss of about $ 638 million this year. That is down from a loss of nearly $ 1.3 billion in 2021 though. And sales are expected to surge nearly 70% to $ 4.3 billion.
But others in the industry seem envious of the fact that AMC has become a pop culture phenomenon.
“While Cineworld would, of course, have welcomed the liquidity of becoming a” meme stock “like AMC, we were never so lucky!” said Israel Greidinger, deputy chief executive officer of Cineworld, in the company’s bankruptcy filing,
That may be just sour grapes … or stale popcorn … though.
Nobody can accuse Aron and AMC of throwing up their hands and doing nothing to combat the fact that the economics of the movie theater business have arguably changed forever. Aron embraced the apes with open arms. Whether or not that means the stock will rebound is another question entirely.