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AMC CEO Adam Aron won’t sell more shares ‘anytime soon,’ he tells investors: ‘I’m with you’


AMC CEO Adam Aron has told investors he won’t be selling any more shares of the cinema chain “anytime soon,” telling investors: “I’m with you.”

“About 2/3 of my total pay is in stock not cash,” he tweeted on Monday. “Going public first, I only sold shares once in those 7 years, a period of 65 days, from November 21 to January 22. My stock sale ended a year ago. I will NOT sell any more anytime. I ride with you.

Aron sold more than $40 million stake in AMC Entertainment Holdings Inc.
AMC,
-3.44%

warehouse from November 2021 to January 2022.

See: AMC CEO asks board to freeze his pay, wants other top executives to give up pay hikes: ‘It’s right not to raise salaries for top executives’

Last month shares of AMC plunge towards a 22-month low after the company announced a plan to raise $110 million in equity and said it was looking to split its common stock in a 1:10 ratio. Shares of the meme stock darling have fallen 75.6% in 2022, outperforming the S&P 500
SPX,
-0.40%

down 19.4%. Shares hit a 52-week low of $3.81 on December 28, 2022.

‘I work in the best interest of AMC shareholders because I am a — and a major shareholder!’


— Adam Aaron

Last week Aron speak he asked the company’s board to “circle red and freeze” his cash and target stock to pay for 2023. Aron, who has led AMC since 2016, described the move. his stance in a series of tweets as AMC stock headed for its third consecutive drop after Aron Announcement of share sale and reverse stock split plan.

See: Wedbush analyst says AMC CEO’s pay freeze is a move to appease frustrated investors

The wage freeze is a move to appease cinema chain investors, according to Wedbush Vice President of Equity Research, Alicia Reese.

AMC, like fellow meme stock GameStop Corp.
GME,
-6.83%
,
was the main beneficiary of the frenzy of trading in January 2021, which sent shares of struggling companies soaring to dizzying highs.

AMC Preferred Equity Units
ape,
-14.89%
,
or APE, launched trading in Augustheralds the latest chapter in its journey to take the cinema chain from a besieged pandemic poster kid to a meme-stock phenomenon.

See: What can we expect from AMC, GameStop, and Bed Bath & Beyond meme stocks in 2023?

APEs have dropped 76.5% since launch. The name is a nod to the investors who have turned the company into a stock meme, who often refer to themselves as “monkeys” or “ape nation.”

In another tweet on Monday, Aron described his AMC and APE holdings.

“Some of you also forgot that I currently own or will invest about 3 million shares of AMC and 3 million units of APE preferred,” he wrote. “It is a huge incentive to do what is best for all AMC shareholders. I work in the best interest of AMC shareholders because I am a — and a major shareholder!”

Last week, Aron explained that he’s also asked AMC’s 15 to 20 top executives to waive their cash raises in 2023, and they agreed.

See: Is the golden age of meme stocks over?

Despite the top-level pay freeze, Aron confirmed that AMC employees will get a raise. “Yes, absolutely,” he tweeted in response to a question posed on Twitter. “We only ask those at the top to make financial sacrifices.”

In November AMC report 12 of itorder consecutive quarterly losses, sending the company’s stock plunging. AMC, which describes itself as the largest movie theater chain in the world, ended the third quarter with liquidity of just under $895.8 million. “We will use it to continue growing but also to further reduce leverage,” Aron said on a conference call to discuss the results.

In a filing with the Securities and Exchange Commission on December 21, AMC said it had entered into discussions about a possible acquisition of rival Cineworld Group PLC.
film,
+0.80%

but a definitive agreement was not reached with Cineworld’s lenders and negotiations did not continue.

See: AMC stock plunges after reporting 12th consecutive quarter loss

“Negotiations have paused with several Cineworld lenders for AMC to acquire some Regal/Cineworld theaters, with APE as partial payment,” Aron tweeted on Dec. 21. “We were disqualified. The law ONLY uses our cash or stock when we are convinced that doing so is in the best interest of AMC shareholders.”

London-based Cineworld, the company that owns Regal Cinemas, file for Chapter 11 bankruptcy protection in September 2022. On Tuesday Cineworld speak that neither the company nor its advisors were negotiating with AMC about the sale of its cinema assets.

In a note released Tuesday, B. Riley Securities lowered its AMC stock price target to $4.50 from $7.50. It also lowered its 2023 and 2024 box office estimates from $9.5 billion and $10.7 billion to $8.9 billion and $10.1 billion respectively. B. Riley Securities analyst Eric Wold writes: “While studios increasingly embrace theatrical length, post-production backlogs are delaying releases.

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