AMC Entertainment shares plummeted Thursday after the theater chain indicated in an SEC filing that it might sell up to $250 million worth of its stock.
The Leawood, Kan.-based exhibition giant said it was considering selling the stock to offset its poor box office revenue during the first fiscal quarter of 2024. Hours after the filing came out Thursday morning, AMC stock was down about 15%.
In the filing with the Securities and Exchange Commission, the nation’s largest movie theater company partly blamed the disappointing box office returns on last year’s writers’ and actors’ strikes, which delayed several major theatrical releases and effectively shut down film and TV production for about six months.
AMC Chief Executive Adam Aron previously implored the entertainment unions and the Hollywood studios to end their labor disputes “immediately” to mitigate the “collateral damage from these lengthy work stoppages.”
The exhibitor also cited in the SEC filing “increased seasonal working capital requirements … and the resulting cash burn” it has suffered.
“We intend to use the net proceeds, if any, from the sale … to bolster our liquidity, to repay, refinance, redeem or repurchase our existing indebtedness (including expenses, accrued interest and premium, if any) and for general corporate purposes,” the filing reads.
The beginning of 2024 spelled trouble for AMC and other cinema operator as big-budget studio vehicles such as Sony Pictures’ “Madame Web” and Apple’s “Argylle” tanked and domestic box office revenue fell 20% from the previous year. Scattered titles such as Paramount Pictures’ “Bob Marley: One Love” and “Mean Girls” made decent money. But pickings remained fairly slim until March, when Warner Bros. and Legendary’s “Dune: Part Two” opened with more than $80 million in the U.S. and Canada, the first movie to do so in four months.
The exhibition industry was still recovering from the COVID-19 pandemic — which shuttered theaters worldwide — when members of the Writers Guild of America and the Screen Actors Guild-American Federation of Television and Radio Artists went on strike.
In response to the overlapping work stoppages, studios pushed at least a dozen pictures to 2025 from 2024, including the eighth installment in Paramount’s “Mission: Impossible” franchise and Disney’s live-action remake of “Snow White.” Consequently, this year’s release calendar is thinner than exhibitors had hoped.
Analysts expect full-year box office revenue for 2024 to fall somewhere between $8 billion and $8.5 billion in the United States and Canada, which would be down from 2023’s $9-billion domestic haul — despite a slew of highly anticipated sequels and franchise installments on the horizon.
Still to come in 2024 are Universal Pictures’ “Wicked,” Warner Bros.’ “Furiosa: A Mad Max Saga,” Paramount’s “Gladiator 2,” Sony’s “Venom: The Last Dance,” Amazon MGM’s “Challengers” and Disney’s “Deadpool & Wolverine.”
