AMC Entertainment CEO Adam Aron is doing a heck of a job selling the sizzle to exuberant retail investors, said one Wall Street analyst with a $2 price target on the stock.
“He has done a remarkable job in outreach and keeping his shares afloat with his shareholders and selling things like the ‘ape’ popcorn and Hycroft Mining and the like,” Wedbush Analyst Alicia Reese said on Yahoo Finance Live (video above). “The average institutional shareholders wouldn’t necessarily go for all of these tactics, but he’s certainly been able 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 rollout of its new microwavable popcorn line.
“I just had yet another meeting taste testing once again recipes for our new microwavable and ready-to-eat popcorn — which we hope to sell nationally in the U.S. in 2023,” Aron tweeted. “Tastes absolutely great! The secrets to AMC popcorn include that we only buy the best grade of corn there is.”
The company also issued a new class of shares, which began trading on the NYSE on Monday under the ticker APE in a nod to the retail investors who commonly refer to themselves as apes and powered the stock during the COVID-19 pandemic.
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 the company’s new APE shares should allay fears that the movie chain could cripple under the weight of debt incurred during the COVID-19 pandemic.
“It takes survival risk off the table in the near term,” Aron told Yahoo Finance previously. “So we can raise cash if we need it. That is good for our shareholders.”
Aron added that this latest clever initiative (in addition to the gold mine AMC bought earlier this year) will help AMC raise cash to reduce debt and look at acquisitions of more movie theater chains.
“The other thing it lets us do is raise capital to grow, raise capital for M&A activity, and raise capital to pay down debt,” Aron said. “These are all good things for AMC. That, combined with an improving box office, a recovery from the horrible pandemic of 2020 and early 2021 — these are good days for AMC.”
Wedbush’s Reese sees other uses for AMC’s cash too.
“He has an opportunity now to use those APE shares, of course with dilution, but to repay a significant portion of the company’s staggering debt balance and accelerate the growth, the upgrading in Europe where there is plenty of potential in the Middle East for high-value theater locations,” Reese said.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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