AMC shares are on pace for their largest daily percentage decline since Nov. 9
Shares of AMC Entertainment Holdings Inc. fell 8% Tuesday, putting the stock on pace for its biggest daily percentage decline since Nov. 9, when it fell 13.7%.
The movie-theater chain and meme-stock darling is also on pace for a two-day losing streak after ending Monday’s session down 3.6%. The S&P 500 SPX index is down 0.2% Tuesday. AMC (AMC) rival Cinemark Holdings Inc.’s (CNK) stock is down 1.7% Tuesday and Imax Corp. (IMAX) is down 1.2%.
Earlier this month, AMC reported third-quarter results that beat top- and bottom-line expectations Wednesday, as the company swung to a profit. AMC also reported positive net income for the second straight quarter.
But speaking during a conference call to discuss the results, AMC CEO Adam Aron said that the short-term impact of the writers’ and actors’ strikes will cause challenges for AMC in 2024. Just a few hours later, the Screen Actors Guild-American Federation of Television and Radio Artists announced a tentative deal with studios. Hollywood writers ended their strike in September.
In a note released Tuesday, analyst firm B. Riley Securities lowered its domestic box-office projections for 2023, 2024 and 2025, citing the lingering impact of the Hollywood strikes. “Numerous films have shifted release dates due to the strikes,” Eric Wold wrote. Set against this backdrop, the firm lowered its 2023 box-office projection to $8.927 billion from $9.216 billion, its 2024 projection to $8.609 billion from $9.617 billion, and its 2025 projection to $9.920 billion from $10.299 billion.
B. Riley set a neutral rating for AMC. Of seven analysts surveyed by FactSet, four had a hold rating and three had a sell rating for AMC.
Earlier this month AMC filed for an “at the market” sale of up to $350 million in common shares.
In an SEC filing, AMC said that it intends to use the proceeds from the sale to bolster liquidity; to repay, refinance, redeem or repurchase its existing debts; and for general corporate purposes.
AMC is locked in a battle to reduce its debt load, and CEO Adam Aron has repeatedly warned that the company faces liquidity challenges. In September, AMC announced the completion of an at-the-market equity offering, raising approximately $325.5 million.
AMC’s stock has fallen 81.7% in 2023, compared with the S&P’s gain of 18.2%.