AMC Entertainment CEO Adam Aron is doing a great job selling the sizzle to exuberant retail investors, said a Wall Street analyst with a $2 price target on the stock.
“He’s done a remarkable job of publicizing and keeping his stock afloat with his shareholders and selling things like ‘monkey’ popcorn and Hycroft Mining and the like,” Wedbush analyst Alicia Reese said on Yahoo Finance Live (video above). “Average institutional shareholders wouldn’t necessarily adopt all these tactics, but he certainly managed to sell them to his shareholder base.”
This week, investors got another taste of Aron’s showmanship on Twitter – where he has more than 272,000 followers – after the CEO touted the launch of his new microwave popcorn line.
“I just had another meeting testing out recipes for our new microwave-ready, ready-to-eat popcorn – which we hope to sell nationally in the US in 2023,” Aron said. tweeted. “It tastes great! AMC popcorn secrets include that we only buy the best kind of corn there is.”
The company also issued a new class of stock, which began trading on the NYSE on Monday under the code APE in a nod to retail investors who commonly refer to themselves as monkeys and fueled stocks during the coronavirus pandemic. COVID-19.
A single APE unit was granted for each common share, forming about 517 million shares of this new stock.
Aron told Yahoo Finance Live that APE’s new shares must calm the fears that the cinema chain could paralyze under the weight of debt incurred during the COVID-19 pandemic.
“It takes survival risk off the table in the short term,” Aron told Yahoo Finance earlier. “So we can raise money if we need to. That’s good for our shareholders.”
Aron added that this latest smart move (in addition to the gold mine AMC bought earlier this year) will help AMC raise money to reduce debt and look into acquisitions of more theater chains.
“The other thing it allows us to do is raise capital to grow, raise capital for mergers and acquisitions activities and raise capital to pay off debt,” Aron said. “All of this is good for AMC. This, combined with an ever-improving box office, a recovery from the horrific pandemic of 2020 and early 2021 – these are good days for AMC.”
Wedbush’s Reese also sees other uses for AMC’s money.
“He now has the opportunity to use these APE shares, of course with dilution, but to pay off a significant part of the company’s debt balance and accelerate growth, modernization in Europe, where there is a lot of potential in the Middle East for highs – value theater locations,” Reese said.
Brian Sozzi is a general editor and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi is at LinkedIn.
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