(Bloomberg) -- AMC Entertainment Holdings Inc., the world’s largest movie theater chain, declared a special preferred stock dividend to investors. The shares fell.
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Shareholders will get one share of the new preferred stock, which AMC Chief Executive Officer Adam Aron said would be a reward for investors. The preferred stock, to be listed on the New York Stock Exchange under the ticker ‘APE,’ would be convertible to AMC shares if authorized by investors. That would dilute existing shareholders.
The company reported a loss of 20 cents a share, excluding some items, better than the 24-cent loss analysts expected. Revenue more than doubled to $1.17 billion, matching estimates.
AMC is still shaking off a complete collapse in its revenue in 2020. While ticket sales are improving, the chain fell short of the $1.5 billion in sales it reported in the second quarter of 2019, before the pandemic started.
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Key Insights
Ticket sales more than doubled compared to a year earlier, helping drive revenue closer to pre-pandemic levels. AMC is also relying on higher prices to generate more cash. The chain sold 43.5 million tickets in the US in the second quarter, compared to 71.9 million tickets sold in the second quarter of 2019.
Major pictures including “Doctor Strange in the Multiverse of Madness” and “Top Gun: Maverick” helped draw customers to theaters in the second quarter.
Aron has taken an unusual tack, including buying a 22% stake in mining company Hycroft Mining Holding Corp. in March. The company said it wrote down some of the value of that investment, but still believes in it long term.
Shareholders have questioned some of Aron’s choices and rejected on an advisory basis his proposed $19 million pay package at the company’s 2022 annual meeting.
Market Reaction
AMC shares were down 8% to $17.16 in extended trading after the results were announced. The stock was down 33% this year through Wednesday’s close in New York, compared to a 13% decline in the S&P 500 Index.
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