Despite Last Week's Debt For Equity Swap, AMC Bonds Are Still Holding Most of Their Gains

AMC Entertainment Inc.’s bonds have maintained last week’s gains, even as the company's shares fell following their meme-stock surge.

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As illustrated by data from BondCliQ Media Services, AMC’s 10% bond, which matures in June 2026, experienced the most significant gains. This bond, part of a debt exchange, rose by approximately 15 points last week and has retained most of those gains.

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Last week, AMC announced it would issue 23.3 million shares in exchange for $163.9 million in bonds in a debt-for-equity swap. According to a regulatory filing, these bonds mature in 2026. Additionally, AMC completed a $250 million at-the-market equity capital offering last week.

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During a conference call to discuss AMC’s recent first-quarter results, CEO Adam Aron highlighted that the company has about $4.5 billion in debt, with significant maturities due in 2026.

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Similar to fellow meme stock GameStop Corp., AMC saw its stock price spike on May 13 and 14, driven by the return of commentator Keith Gill, also known as Roaring Kitty, to social media. However, AMC’s shares later pared back their gains, closing Friday’s session down 5.1%, while GameStop fell 19.7% that day.

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The meme-stock frenzy seemed to subside somewhat on Monday. GameStop shares saw a modest 4.2% increase, whereas AMC shares climbed 9.8%. On Tuesday, GameStop shares were down 6.2%, and AMC’s stock decreased by 0.4%.

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The stability in AMC's bonds, particularly the 10% bond maturing in June 2026, underscores investor confidence despite volatility in the stock. The bond's resilience contrasts with the roller-coaster ride of AMC's shares, which have been influenced by the broader meme-stock phenomenon and social media-driven trading.

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AMC’s debt-for-equity swap and the completion of its $250 million equity capital offering are strategic moves to manage its substantial debt load. The company’s CEO, Adam Aron, emphasized the importance of addressing the $4.5 billion debt, especially with large maturities looming in 2026. These financial maneuvers are critical as AMC navigates the post-pandemic recovery and seeks to stabilize its financial position.

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The meme-stock trend, characterized by significant price movements driven by retail investor enthusiasm and social media activity, has created a unique dynamic for companies like AMC and GameStop. The surge in AMC’s stock price following Keith Gill’s return to social media illustrates the ongoing influence of online commentators and the volatility they can introduce. However, the subsequent decline in AMC’s shares also highlights the transient nature of such rallies.

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Monday's trading saw a relative calm in meme-stock activity, with GameStop shares posting a modest 4.2% gain and AMC shares rising by 9.8%. By Tuesday, the meme-stock frenzy appeared to wane further, with GameStop shares down 6.2% and AMC’s stock slightly down by 0.4%. This fluctuation underscores the unpredictability and speculative nature of meme stocks, which can experience rapid gains and losses based on market sentiment and online discussions.

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Overall, while AMC’s shares have been subject to significant volatility, the company’s bonds, particularly the 10% bond maturing in June 2026, have shown stability and resilience. This suggests a level of investor confidence in AMC’s long-term viability, even as the company works to manage its debt and navigate the challenges posed by the post-pandemic environment and the meme-stock phenomenon.

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