AMC Stock: Adam Aron Says That Hollywood Strikes Ruined the Early 2024 Box Office

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Shares of AMC Entertainment (NYSE:AMC) stock are already down by over 30% this year, and CEO Adam Aron is very aware. On Sunday night, Aron posted this message on X (formerly Twitter):

Aron has previously posted that the global box office had been “ludicrously anemic” since the Covid-19 pandemic. The previous post also congratulated Philadelphia 76ers center Joel Embiid for scoring 70 points in a single NBA game. Aron served as the CEO of the basketball team from 2011 to 2013.

The 2023 actors’ strike officially ended in November after the SAG-AFTRA union ratified an agreement with Hollywood studios. The writers’ strike ended in September with an agreement between the WGA union and the AMPTP representing the studios. Both agreements resulted in several changes, including pay hikes, artificial intelligence (AI) representation rights and bonuses.

However, it appears that the effects of the strikes are still lingering.

AMC Stock: Adam Aron Says That Hollywood Strikes Ruined the Early 2024 Box Office

The Beekeeper is currently the highest-grossing film of 2024, bringing in $104.18 million globally and $42.28 million in the U.S. Mean Girls trails behind with a global box office of $83.40 million and a domestic box office of $60.80 million. For perspective, Barbie led the 2023 box office with global sales of $1.44 billion and domestic sales of $636.23 million.

Another issue that has plagued AMC stock is dilution in order to pay down debt. On Dec. 11, AMC disclosed that it had completed a $350 million at-the-market (ATM) offering through the sale of approximately 48 million shares. However, the company issued another 4.75 million shares from Dec. 12 to 14 in exchange for $36 million in principal value of its 10%/12% cash/payment-in-kind (PIK) toggle second lien subordinated notes due in 2026. On Dec. 19, AMC announced that it would issue another 3.34 million shares in exchange for $25 million in principal value of its 2026 notes.

Following several quarters of declines, AMC’s debt as of the third quarter tallied in at $4.8 billion, a multiple of the company’s market capitalization of around $830 million.

AMC hasn’t made any major announcements so far this year. Meanwhile, its venture into the popcorn and chocolate markets generated major fanfare among shareholders last year. However, these aspirations don’t appear to have helped the movie theater chain in its road to recovery, as AMC declined by 80% in 2023.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

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