AMC Entertainment Holdings (AMC) experienced a significant surge in its stock value, closing up 33% at $5.85 on Monday, following the successful opening weekends of two blockbuster movies, “Barbie” and “Oppenheimer.” The entertainment giant also received a favorable legal ruling regarding its stock conversion issue.
The opening weekend of “Barbie” proved to be a monumental success, generating a remarkable $162 million in domestic box office revenue. Notably, this makes it the highest-grossing opening weekend for a female-directed film ever. Additionally, “Oppenheimer” raked in an impressive $82 million over the weekend, as reported by The Hollywood Reporter.
This surge in AMC’s stock marks yet another peak in the company’s rollercoaster journey, which has seen its stock price fluctuate from nearly $2 per share to meme stock status, and then back to single digits.
AMC Theaters witnessed a substantial influx of moviegoers, with nearly 8 million people visiting its theaters worldwide during the weekend. This represents the highest attendance level since 2019. The company attributed this success to consumers who opted for the unique experience of watching both “Barbie” and “Oppenheimer” as a double feature. Approximately 87,000 members of their Stubbs reward program booked this double bill.
Moreover, AMC Theaters achieved its second-highest concession sales in the company’s history on Saturday. The “Barbenhimer” Saturday’s concession sales only trailed behind the opening Saturday for “Avengers: Endgame.”
AMC Chairman and CEO, Adam Aron, lauded the success of both films, emphasizing that well-made and well-marketed productions can captivate audiences and achieve tremendous success, as evident from the box office performance of “Barbie” and “Oppenheimer.”
Another factor contributing to the stock’s upward momentum was a Delaware State Court ruling that prevented AMC from converting equity stock into common stock. This conversion was part of a settlement agreement in a lawsuit filed by Allegheny County Employees’ Retirement System, which accused the board of breaching its fiduciary duty.
However, Delaware judge Morgan Zorn rejected the conversion plan, citing concerns about the rights of shareholders not involved in the lawsuit. Approximately 2,850 purported shareholders contacted the court to voice their objections.
In response to the court’s decision, Aron expressed the importance of financial flexibility for the company. He emphasized that AMC must be able to raise equity capital to safeguard shareholder value over the long term.
AMC’s journey has been emblematic of the 2021 meme stock market frenzy, where retail investors rallied around stocks targeted by institutional investors. The stock reached an all-time high of $72.62 in June 2021, enabling the company to raise capital and avoid bankruptcy. Since then, the stock has experienced fluctuations, currently trading at $5.85 per share, down approximately 23% from its peak earlier this year.
Source : USA Today
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