AMC Entertainment Holdings Inc. continued its downward trend on Thursday, marking a four-day losing streak as its stock closed at $5.30, a 5% decrease. This stretch of losses is the longest since the five-day period ending on Nov. 13, 2023, further underscoring the challenges faced by the once-popular meme-stock.
The movie-theater chain, once a darling of meme-stock investors, had already set a record low close of $5.58 in the previous session. This new record follows a prior low of $6.07 on Dec. 21, 2023, as reported by Dow Jones Market Data, referencing available records dating back to Dec. 18, 2013.
AMC’s current stock woes stand in stark contrast to its heyday as a meme-stock phenomenon, culminating in an all-time closing high of $339.05 on June 2, 2021.
In a filing made on Tuesday, AMC revealed that between Dec. 28 and Dec. 29, 2023, it engaged in privately negotiated exchange agreements. These agreements led to the issuance of 3,258,657 shares of Class A common stock in exchange for $22.5 million of notes due in 2026. The implied value of the common stock issued was $6.94 per share, according to AMC. The filing also noted that while similar transactions might occur in the future, the company is not obligated to pursue them.
This move is part of AMC’s ongoing efforts to address its substantial debt, which exceeded $5 billion in 2022. In that year, AMC initiated its APE special dividend and completed the conversion of the APEs into AMC common stock, coupled with a reverse 1-for-10 split of common stock. In December, the company concluded its latest at-the-market equity offering, raising approximately $350 million. AMC CEO Adam Aron has consistently warned of the company’s liquidity challenges.
Over the past 12 months, AMC’s shares have witnessed an 84.8% decline, a stark contrast to the S&P 500 index’s gain of 23.1%. Analysts surveyed by FactSet offer a mixed outlook, with four recommending a hold rating and three suggesting a sell rating for AMC. The company’s stock trajectory continues to be closely monitored amidst ongoing financial challenges.a
