Following the announcement of its most recent debt restructuring agreement, shares of AMC Entertainment Holdings Inc., the original meme stock and chain of movie theaters, fell on Tuesday.
The stock is plunging as the Leawood, Kansas-based corporation converts a portion of its substantial debt load to equity, with possibly much more to follow.
In afternoon trading, AMC’s stock (AMC) fell 8.5%, setting it up for the largest one-day collapse since it fell 18.7% on May 28. According to FactSet, trading volume exceeded 21.5 million shares, which is more than the average full-day volume of 11.1 million shares over the previous 30 days.
AMC will refinance debt that is scheduled to maturity in 2026 with the help of the about $223.3 million in new financing provided by the debt agreement with major creditor groupings.
The deal lowers the company’s present debt, but it does so at the expense of current shareholders’ ownership of a smaller portion of the business.
of exchange for at least $143 million of 6% to 8% notes that are due in 2030, holders of the company’s exchangeable notes will get 79.8 million shares of common stock. Over time, another $195 million in debt could be converted into common stock.
“The transaction reduces leverage, extends maturities and improves liquidity, though it introduces near-term dilution and potential for additional share issuance tied to future conversions,” said Benchmark analyst Mike Hickey in a note.
For a while now, AMC has been occupied with debt restructuring. The business refinanced $2.4 billion of its 2026 long-term debt to 2029 and 2030 last year. AMC’s corporate borrowings had a carrying value of $4.08 billion as of December 31.
Due to impending debt obligations, the company’s liquidity status has recently come under scrutiny. AMC has $378.7 million in cash and cash equivalents at the end of its most recent fiscal first quarter.
Adam Aron, the CEO of AMC, wrote on X that the agreement was “one of the more important developments in AMC’s multi-year effort to fight back from the ravages that COVID prompted in 2020.”
Additionally, the CEO restated his recent remarks regarding a growing box office.
“The growing box office since April has been roaring loudly,” he stated. “Thank you to ‘Minecraft,’ ‘Sinners,’ ‘Lilo & Stitch,’ ‘Thunderbolts*,’ ‘Final Destination Bloodlines,’ ‘Mission: Impossible – The Final Reckoning,’ ‘How to Train Your Dragon,’ ‘F1,’ ‘Jurassic World Rebirth,’ ‘Superman’ and so many more appealing movies!”
Aron stated earlier this year that unless a shareholder vote is authorized, no additional funds will be raised from the sale of common shares in 2025.
According to the following figure from data-solutions provider BondCliQ Inc., Tuesday saw a higher net selling of AMC’s bonds as the company’s stock dropped off.
According to several sources, AMC will begin displaying additional advertisements in its preshow lineup on Tuesday. AMC did not immediately reply to MarketWatch’s request for comment.
In 2025, AMC’s stock has dropped 28.7%, while the S&P 500 index has gained 5.6%.
