AMC Entertainment (AMC) shares slumped lower Wednesday after the movie theatre chain posted a wider-than-expected third quarter loss and unveiled disappointing figures from the sale of preferred equity units earlier in the summer.
AMC, which has been courting retail investors since its stock was swept-up in the 'meme stock' craze that captivated markets in early 2021, raised on $36.4 million from its preferred unit sales, suggesting muted appetite from its key investor base, often referred to as 'Apes'.
CEO Adam Aron also decried a lack of new movie releases -- and indeed plans for blockbuster films over the holiday season -- as he unveiled a loss of $226.9 million for the three months ending in September. Revenues, however, were surprisingly solid at just over $1 billion, topping Street forecasts of $961 billion.
AMC's cash burn rate, however, accelerated to $179.2 million, with the group citing "the relatively quiet box office in August and September, together with seasonal working capital requirements."
"Movie theater operators need more movies. Because of pandemic-induced production delays, the number of big movie titles being released by the major studios is still down considerably, down 20% to 30% versus pre-pandemic norms," Aron told investors on a conference call late Tuesday. "We eagerly await more film product to show, but I also can report to you today that we are seeing considerable progress on this front."
"That's the major challenge facing the movie industry right now above all else, and there can be optimism that more movie titles rather than fewer movie titles are in our future," he added.
AMC shares were marked 6.7% lower in early Wednesday trading to change hands at $5.24 each, extending their six-month decline to around 58%.
AMC's preferred equity units, which carry the ticker symbol APE, were marked 10.3% lower at $1.44 each. The units opened at $6.95 each in late August, and traded as high as $10.50 each shortly after.
