AMC Entertainment AMC shares plunged lower Thursday after the movie theatre chain, and meme stock favorite, unveiled plans to see as much as $350 million in new common equity in its second capital increase in three months.
AMC, which posted better-than-expected third quarter revenues late Wednesday thanks to the massive success of the 'Barbie' and 'Oppenheimer' films, filed plans for the share sale with the Securities and Exchange Commission Thursday.
The group raised $325 million through the sale of 40 million shares in September, saying it would use the proceeds to pay down its debts, which are estimated at $5.1 billion.
That plan follows a legal settlement with the Delaware Chancery Court in early August between AMC and a group of disgruntled shareholders, who said the group's plans to convert special preferred share units – known as APE units – into common stock would dilute their investment.
AMC won the right to allow the APE unit conversion, which were exchanged on a 1 for 7.5 common share basis following a reverse 1-for-10 split of the common shares on August 24. The APE units are no longer listed.
AMC shares were marked 13.6% lower in early Thursday trading to change hands at $8.72 each, a move that would extend the stock's 2023 decline to around 71.5%.
On Wednesday, AMC Entertainment reported 3rd quarter 2023 financial results that featured a net profit. Our Revenues and Adjusted EBITDA were the highest 3rd quarter numbers in AMC’s entire 103-year history. You can find the full report here: https://t.co/RUmxBWz4jP.. pic.twitter.com/XA4JgrNd6Y
— Adam Aron (@CEOAdam) November 9, 2023
AMC posted softer-than-expected third quarter earnings late Wednesday, with a bottom line of 8 cents per share that missed Street forecasts by a dime, but noted that overall revenues rose 45% from the same period last year to a third quarter record of $1.41 billion.
'Barbie,' the Warner Bros. Discover WBD film about the eponymous Mattel MAT-made doll staring Margot Robbie and Ryan Gosling, has taken in $1.5 billion in global office receipts since its late July debut, according to Comscore data, surpassing 'Super Mario Bros. Movie' as the biggest hit of the year.
AMC is also set to benefit from the release of the 'Taylor Swift: The Eras Tour' movie, which generated nearly $100 million in box office receipts in its opening weekend last month, making it the highest-grossing concert film on record.
The film, which chronicles the stadium tour as well as highlights from the seventeen-year career of one of the world's biggest and most lucrative entertainers, likely drew between $95 million and $105 million in weekend revenues in the U.S. and Canada, based on data from Comscore and Boxoffice Pro, with another $30 million-plus from international markets.
The overall tally for the Eras Tour film, which was shot from performances at Los Angeles' SoFi stadium, dwarfs the previous concert film record, attributed to Justin Bieber's 2011 release 'Never Say Never', which drew around $29.5 million in its opening weekend and $99 million from hits entire months-long run.
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