- AMC Theaters had best weekend in four years as 'Barbie' and "Oppenheimer" drew large crowds.
- AMC filed a revised stock conversion proposal after a judge ruled against a settlement of AMC's stock conversion plan on Friday.
- CEO Adam Aron said it was “critical” that the company raise funds.
Shares of AMC Entertainment Holdings (AMC) soared more than 27% on Monday morning after the theater chain filed a revised stock conversion proposal, and the releases of Barbie and Oppenheimer drew large crowds over the weekend.
AMC reported that the summer's two hit movies helped it post its biggest attendance and box office weekend since 2019. Additionally, AMC's food and beverage sales on Saturday hit the second-highest single-day total in history.
The company also filed a revised stock conversion proposal after a Delaware judge on Friday reversed the company's decision to convert AMC preferred stock (APE) into AMC common stock in a bid to raise capital.
On Sunday, CEO Adam Aron wrote an open letter to shareholders, warning that raising short-term equity “is critical for the business.” He said without it, AMC might run out of cash next year or the year after or might not be able to refinance and stretch its debt satisfactorily.
Following the losses suffered during the COVID-19 pandemic, Aron said he was driven by an overriding goal of keeping AMC from “financial ruin.” He indicated that the only way to achieve this is to bring in more money. Now is a critical time with strikes by actors and writers that could delay the release of new films in 2024 and 2025, he added.
While a large majority of investors voted in favor of the stock conversion proposal in March, several thousand filed lawsuits to block it, fearing further illusions in AMC stock. A deal was reached between the parties, but Delaware Chancery Court Vice Chancellor Morgan Zurn rejected it.
Aron noted that the company and the plaintiffs have entered into “a modification of the statutory release surrounding the Delaware litigation settlement in an attempt to address the concern expressed by the Court”.
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