Amc's Stock Surges 14%, on Pace for Its Biggest Gain Since August

On Tuesday, AMC Entertainment Holdings Inc. witnessed a notable surge in its stock price, soaring by 10.1%, marking its most substantial daily percentage gain since February 6th, when it experienced a 10.9% increase.

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Despite the absence of any apparent news catalyst, the stock managed to break a four-day streak of losses. Short interest, representing a percentage of AMC's publicly available shares, stood at 16.06%, according to the latest data from exchanges.

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AMC shares (AMC, +7.61%) have recently plummeted to a series of unprecedented lows, declining by 55.6% in 2024 alone. Comparatively, the stock has plummeted by over 90% from its historical peak closing price of $44.56, recorded on June 2, 2021, during the meme-stock frenzy, as reported by Dow Jones Market Data. During after-hours trading on Tuesday, AMC shares climbed by 3.7%.

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Last week, Adam Aron, the CEO of AMC, adamantly stated that the notion of chapter 11 bankruptcy for the movie-theater chain is unimaginable, despite the tumultuous events of recent years.

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The onset of the pandemic dealt a severe blow to AMC, compelling the closure of movie theaters nationwide in March 2020. Transitioning from a beleaguered victim of the pandemic to a phenomenon within the meme-stock realm in 2021, AMC has continued to grapple with speculations surrounding its potential bankruptcy. However, Aron dismissed such conjecture, asserting the company's resilience.

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"I personally find it inconceivable that AMC would undergo a restructuring akin to what Regal Cinemas experienced, including filing for chapter 11," Aron remarked during an interview with the Hollywood Reporter at CinemaCon in Las Vegas. "One aspect I take great pride in is that leading into the pandemic, AMC was in a remarkably robust position."

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Addressing its debt burden has become a focal point for the movie-theater chain. In December, AMC concluded an at-the-market equity offering, generating approximately $350 million to alleviate its debt obligations.

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As disclosed in its fourth-quarter earnings release, AMC's total debt, encompassing finance leases, stood at around $4.56 billion by the end of 2023, down from $5.01 billion at the close of 2022.

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Last month, AMC filed for the sale of up to $250 million in stock. During the conference call discussing the company's fourth-quarter results, Aron underscored the importance of liquidity and highlighted the $418 million raised through the conversion of AMC preferred equity units into common stock in August 2023. "It's indisputable — cash reigns supreme," he emphasized.

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In a recent analysis, Benchmark analyst Mike Hickey acknowledged AMC's debt obligations while also highlighting its strengths. "Despite facing significant debt maturation of $2 billion in 2026, AMC benefits from its extensive Imax presence and potential expansion in premium viewing formats," Hickey wrote. "The outlook appears cautiously optimistic as the cinema sector prepares for upcoming blockbuster releases."

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Although bankruptcy rumors have persisted, Hickey deemed an immediate collapse improbable.

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