What’s more amazing than watching communication services stock AMC jump more than 2,200% in just five months? Making $3.8 billion on the move.
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And that’s the reality of the top five holders of the beleaguered movie theater chain, turned must-own stock with many online investors. Just five investors including giant ETF and mutual fund companies including No. 1 Vanguard, BlackRock (BLK) and Invesco Capital (IVZ), pulled in blockbuster scores on shares of AMC Entertainment (AMC) this year, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
What’s amazing is these shareholders hold so much of AMC stock, and it’s not listed in any major stock market index. The company is worth more than $24 billion (even more than fellow meme-stock GameStop (GME)). But due to the practically overnight gains, it’s not in any major index like the S&P 500, S&P Midcap 400 or S&P SmallCap 600. Gains are fanned by speculation on online stock messaging boards like Reddit. And “short” shareholders betting against AMC stock, and forced to buy shares to stop losing money, only add fuel.
“The retail trader is at it again,” said Edward Moya, senior market analyst at Oanda. “No one wants to get in the way of retail investors that are adamantly committed to taking on short-sellers.”
Billion-Dollar Gain On AMC
AMC is considered the poster child of speculation. It’s a money-losing company whose stock is propelled by the fast-money crowd looking to make a quick buck.
But amazingly, it’s the patient index king Vanguard that’s making the most money on the stock’s jump. Vanguard owns more AMC stock than anyone: 37.4 million shares. That’s 7.6% of the company’s shares outstanding, according to S&P Global Market Intelligence.
And now that stake is worth more than $1.8 billion, or $1.76 billion more than it was at the beginning of the year. BlackRock, another ETF kingpin, is the No. 2 winner from the AMC stock phenomenon. It owns more than 27 million shares, or 5.5% of the company, for a nearly $1.3 billion gain this year.
And then there’s Invesco Capital. The ETF provider owns nearly 6.6 million shares, or 1.3% of the company. That’s enough for an impressive $320 million gain this year.
That means just five institutional investors hauled in more than 16% of the $23 billion in gains from AMC stock this year so far.
Also amazingly, not a single individual shareholder owns more than than 0.2% of the company. CEO Adam Aron owns 758,747 shares, or just 0.15% of the company. That’s still enough to shower him with a $35.6 million paper gain this year, though.
ETFs That Own AMC Stock
Don’t think, though, that massive AMC stock gains are due to giant bets by ETFs. Its simply the magnification effect of the stock’s huge gain. AMC stock is up more than all but one stock this year.
AMC stock is a tiny exposure for most ETFs. The ETF with the top percentage exposure to AMC stock is SoFi 50 ETF (SFYF). But it’s only a 2% exposure in a tiny ETF with assets of just $15 million.
For funds with larger dollar-value holdings in AMC stock you have to look at some of the more popular broad small-cap ETFs. iShares Russell 2000 ETF (IWM), a $65 billion-in-assets ETF that tries to own all significant small caps, owns 8.8 million shares of AMC stock. That’s more than any other ETF, says ETF.com. But it’s a scant 0.26% of the ETF’s holdings.
Both the broader Vanguard small-cap ETFs own a decent number of shares of AMC stock. Vanguard Small-Cap ETF (VB) owns 3.5 million shares. And Vanguard Small-Cap Value ETF (VBR) owns 3.3 million. But again, they’re overall tiny positions in the overall portfolios.
AMC Stock Is Now The Headliner
Remarkably, AMC stock continues to soar in a league of its own. None of AMC’s chief movie-theater rivals are seeing any similar gains.
Shares of competing theater chain Cinemark Holdings (CNK) are up just 35.5% this year. That makes Cinemark worth just $2.8 billion, or 88% less than AMC. Never mind that Cinemark has only roughly 50% fewer theaters and screens than AMC’s 1,000 theaters and 10,700 screens.
And big-screen operator IMAX (IMAX) is a small fry in this situation. Shares of IMAX are up just 21.4% this year, making the company worth just $1.3 billion.
Much is on the line for AMC stock this year. The company is aggressively using proceeds from selling stock to pay down debt. AMC ended the first quarter with $5.4 billion in debt and just $813 million in cash. The chain still carries a low junk-bond rating of CCC-, says S&P Global.
And AMC is expected to lose another $1.5 billion in 2021 and nearly $400 million in 2022, analysts say. It’s not seen making money in 2023, either.
The company reports its second quarter results on Aug. 5. Analysts are calling for a quarterly loss of more than $500 million. Analysts also think AMC stock will only be worth 5.11 a share in 12 months — roughly 85% less than Tuesday’s 31.90 closing price.
Time will tell if this showdown will have a happy ending or not.
Top Holders Of AMC Stock Win Big
| Investor | Shares owned (millions) | % Of Company Owned | YTD gain ($ millions) | Value of stake ($ millions) |
|---|---|---|---|---|
| Vanguard | 37.4 | 7.59% | $1,755.3 | $1,834.6 |
| BlackRock | 27.3 | 5.54% | $1,281.5 | $1,339.4 |
| Invesco Capital | 6.6 | 1.33% | $307.1 | $320.9 |
| State Street Global Advisors | 6.5 | 1.33% | $306.4 | $320.2 |
| Geode Capital | 3.8 | 1.26% | $178.2 | $186.2 |
Sources: IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz
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