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AMC's meme stock era is over

Data: Yahoo Finance; Chart: Axios Visuals
Data: Yahoo Finance; Chart: Axios Visuals

AMC continues to dilute its stock as it looks for ways to raise more money and pay down its debt.

Why it matters: AMC has been teetering on the bankruptcy precipice, and it's expected to be a rough year for theaters.

What's happening: Last week, AMC disclosed it issued 3.25 million in new shares via a "series of privately negotiated exchange agreements" between Dec. 28 and Dec. 29 that reduced its debt by $22.5 million.

  • That was following four similar agreements since Thanksgiving, in addition to raising $350 million following the sale of 48 million new shares.
  • AMC warned it may do further debt-for-equity swaps.

By the numbers: Once a meme stock darling, AMC's share price fell to an all-time low multiple times during the first week of 2024.

  • AMC's stock fell more than 15% during its first four days of trading, ending the week at $5.17. It had a slightly better day Monday, ending at $5.29, but is flirting with another all-time low Tuesday morning.
  • Compared to the start of last year, AMC's stock is down more than 40%.

The big picture: During the height of its meme stock craze in mid-2021, AMC was trading at more than $600. It's now less than 1% of that.

  • AMC and GameStop were the two poster children of the meme stock era, which also included Bed Bath & Beyond, National Beverage and headphone manufacturer Koss.
  • GameStop has also seen its share price come down to earth as its business continues to struggle despite numerous cost-cutting attempts. Bed Bath & Beyond went bankrupt and saw its assets acquired by Overstock.com, which revived the brand as an online retailer last year.

What we're watching: The grim outlook for movie theaters could force some hard truths on whether the industry can ever regain its pre-pandemic form.

  • AMC has so far avoided the fate of Cineworld, which declared bankruptcy before reemerging as a private company.
  • AMC has tried to diversify by buying a gold and silver mining company and selling its movie theater popcorn in grocery and retail stores. It's also moonlighted as a distributor of concert films from Taylor Swift and Beyoncé and announced a sequel to the beloved Nicole Kidman ad.
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