AMC Theaters - Bankruptcy Claims Fake, But No One Cares!

 On Monday, May 1st, Robinhood (the mobile app that allows commission-free trading in stocks, ETFs, and crypto - the firm makes its money on interest of client accounts, margin leading, and high frequency traders' sell order information) erroneously announced that AMC Theaters (the large multi-plex cinema chain with over 600 theaters and 10,474 screens) was filing for bankruptcy.

The days of the 20 and 30plex cinemas are over.

That declaration, however, was false. Later, that day, Robinhood confirmed that their trading platform, "experienced a technical issue" that "created a banner declaring AMC was insolvent."

Needless to say, Adam Aron, AMC's CEO went ballistic and tweeted that Robinhood was "either incompetent or evil" and AMC was going to "sue the bastards". 

The news of AMC's demise and the market reaction to was - who cares? AMC is a financial basket case. It has reported losses for the last four years. For the fourth quarter of 2022 it reported a loss of $288 million.

To illustrate how bad management is, in February, it instituted a new admission policy whereby patrons pay an upcharge for seats in the middle of the auditorium!

In separate news, AMC is trying to convert preferred stock into common stock in a 10-for-1 reverse split - thereby raising more, desperately needed, capital. Another management financial ploy.

For 2022, CEO Aron received $23.7 million in total compensation, up 25% from 2021 - a lot of loot for a company on the skids.

AMC's CEO Aron

A popular 'meme' stock in 202l, AMC's current share price is about $5.50. Its total debt is currently at $4.5 billion and has a negative net worth of $2.6 billion.

Seems the only one getting rich is Mr. Aron and the rest of the AMC senior staff. The Company is perhaps beyond redemption and the reason why the Robinhood faux pas had no impact whatsoever on the share price. 

AMC is, unfortunately, the poster child for the large U.S. cinema multiplex chains - they are very poorly managed, offer no customer service or engagement and are essentially a detriment to the cinema exhibition industry.