AMC Entertainment Holdings (AMC) stock closed up 33% at $5.85 on Monday – the first trading day after the blockbuster opening weekends of “Barbie” and “Oppenheimer” and a ruling against the movie theater chain’s board on stock conversion.
“Barbie’s” opening weekend brought in $162 million domestically, the largest opening weekend domestic box office for a female-directed film ever. “Oppenheimer” brought in $82 million this weekend, according to The Hollywood Reporter.
The surge is the latest peak on a rollercoaster ride for the ticker that has moved the company from nearly $2 per share to a meme king and back to single digits.
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‘Barbenheimer’ buoys sentiment
AMC saw the most people fill its theaters in over three years, the chain announced in a press release on Monday.
Nearly 8 million moviegoers went to an AMC theater throughout the world this weekend, making it the most attended weekend since 2019. The company credited consumers who took in the pair of highly-anticipated films as a double feature, noting that 87,000 of their Stubbs reward program members booked a double bill.
AMC Theaters also saw the second-highest concessions sales in the company’s history on Saturday. The “Barbenhimer” Saturday only fell behind the opening Saturday for “Avengers: Endgame.”
“(‘Barbie’ and ‘Oppenheimer’) demonstrated that well-made, well-marketed films that captivate audiences can open on the same weekend and both enjoy great success,” AMC Chairman and CEO Adam Aron said in the release.
Court holds stock conversion
Another factor in the stock’s uptick was a Delaware State Court decision that prevented the company from converting equity stock into common stock.
The conversion was part of an agreement to settle a lawsuit against the company by Allegheny County Employees’ Retirement System claiming that the board breached its fiduciary duty.
The plan was rejected by Delaware judge Morgan Zorn who stated that the plan did not account for the rights of shareholders not included in the lawsuit. Approximately 2,850 purported shareholders contacted the court on the matter.
In response to the judgment, Aron emphasized his belief that the company needs financial flexibility.
“AMC must be in a position to raise equity capital. I repeat, to protect AMC’s shareholder value over the long term, we MUST be able to raise equity capital,” Aron wrote in a statement published to his Twitter account Sunday.
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Meme stock madness
AMC was one of a suite of companies swept up in the 2021 meme stock market, where retail investors purchased stocks shorted by institutional investors.
The stock hit an all-time high of $72.62 in June of 2021, allowing the company to raise capital and stave off bankruptcy.
Since then, the price of AMC shares has largely slid, with the stock trading at $5.85 per share by the time the market closed Monday, down about 23% from AMC’s high point this year.
