The meme-stock phenomenon is on its last legs, and no company is feeling the comedown more than movie-theater chain AMC Entertainment Holdings Inc., WSJ Pro Bankruptcy reported. AMC deftly surfed the meme-stock wave to raise billions of dollars and help it avoid bankruptcy during the pandemic, but its shares have sunk back to roughly where they were trading before the company caught fire in the online trading community. Box-office receipts are falling short, and the meme-stock premium that helped AMC raise fresh capital has all but evaporated. The Leawood, Kan.-based company’s market capitalization is now about $5 billion, down from more than $31 billion at its 2021 peak. Institutional investors are indicating that a debt default is probable, pricing AMC’s senior debt at less than 65 cents on the dollar. With cash having dwindled over the past year, AMC will soon ask its investors to approve a transaction that could help it defy the odds once again. The proposed deal involves the conversion of preferred equity units into common shares, a reverse stock-split, and a possible increase in the amount of new shares AMC can sell. The transaction would likely result in diluting shareholders’ stakes, but could also give the company another way to raise capital as the movie-theater industry struggles to return to prepandemic attendance levels. Shareholders are expected to vote on the proposal in mid-March.
