(Bloomberg) — AMC Entertainment Holdings Inc., the world’s largest movie theater chain, declared a special preferred stock dividend as a “reward” to its investors. The shares fell on the prospect that the stock would be diluted.
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Investors will get one share of the new preferred stock, which AMC Chief Executive Officer Adam Aron said was aimed at “recognizing our passionate and supportive shareholders.”
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 the company and investors. That would dilute existing shareholders.
Apes are what the wave of small investors who dove into AMC shares during the pandemic call themselves. The dividend will be paid at the close of business on Aug. 19. The company is also making available an “I OWN APE” non-fungible token, which will be distributed to the 765,000 members of its AMC Investor Connect program, a way of staying in touch with shareholders. It’s again a way of showing of appreciation, Aron said.
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. AMC 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.
Still, 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. Major pictures including “Doctor Strange in the Multiverse of Madness” and “Top Gun: Maverick” helped draw customers to theaters in the second quarter.
Aron told investors on a conference call that he expected a slow period in the current quarter, until new releases such as the “Black Panther” and “Avatar” sequels come later in the year. He said he looks forward the fourth quarter and all of next year “with absolute glee.”
Aron has made unusual moves in the past, including buying a 22% stake in mining company Hycroft Mining Holding Corp. in March. AMC said it wrote down some of the value of that investment, but still believes in it long term.
Shareholders rejected, on an advisory basis, Aron’s proposed $19 million pay package at the company’s 2022 annual meeting.
AMC shares were down about 5% to $17.72 in extended trading after the results were announced. The stock fell 33% this year through Wednesday’s close in New York, compared to a 13% decline in the S&P 500 Index.
(Updates with info on NFTs in fourth paragraph.)
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