Amid an earnings report that noted another quarterly loss despite increased revenue, for which the AMC CEO partially blamed a lack of high-performing theatrical releases, AMC reported that its controversial “at the market” equity program had resulted in 14.9 million shares of its “Preferred Equity Units” since September 2022.
AMC activated pre-existing shareholder approval months ago to issue preferred equity units, known as APEs. The plan was to issue 425 million such APEs and use proceeds to pay down some of its $5.5 billion in debt. The Preferred Equity Units (NYSE: APE) have raised just $36.4 million in net proceeds.
“As to APEs specifically,” stated Aron, “each AMC-preferred equity unit was designed with essentially similar economics and voting rights as an AMC common share. But markets are markets.” He then stressed that he believed that they would help the company grow, de-level and raise capital.
Aron otherwise urged caution and promised restraint, even as he noted likely strong grosses for films like “Black Panther: Wakanda Forever” (opening Friday) and “Avatar: The Way of Water” (opening December 16).
“I own more stock than anyone else on this call,” the AMC head stated. “As you watch the share price, I watch the share price.
He noted that while the APE stock was lower than in June of 2021 (an all-time high of $77, partially due to inflated trading from would-be AMC fans at the peak of the meme-stock surge), it’s higher than it was in January of 2021.
In terms of declining share prices, he noted external factors, such as the war in Ukraine and related rising energy prices as well as Cineworld filing for chapter 11 bankruptcy which created anxiety for the entire industry. “Prudence” was the word of the day, and the CEO argued that they should never mistake silence for inaction or indifference.
Asked whether shareholders could reverse the APE shares, the AMC head noted that it was legal but would require a shareholder vote.
When asked about Elon Musk’s recent acquisition of Twitter, the arguable social media platform of choice for the vocal CEO, Aron noted how the skewed combining of Adam Aron (of AMC), Ryan Cohen (of Game Stop) and Elon Musk (of Twitter) spelled out A.M.C. Otherwise, he offered no opinions about Musk’s potential for success, noting only Twitter was “the most incredible communications tool I’ve ever seen.”
He noted that, as the CEO of a public company, he should talk about the state of the business rather than the share of the business.
He concluded by answering a question about AMC A-List, a monthly subscription program which began in 2018 and offers customers up to three movies a week in any format (including premium formats like 3-D or IMAX) for $20-$25. He noted that the program made up around 15% of total moviegoing before Covid and was now at 600-700,000 subscribers since the program was un-paused).
He then touted success with concerts, WWE and UFC events and experimentation with sporting events, while again proclaiming preemptive victory with the release of Marvel’s “Black Panther” sequel.