Adam Aron, chairman and CEO of AMC
Alberto E. Rodriguez/Getty Images for CinemaCon
AMC Entertainment Holdings CEO Adam Aron has another title. The movie theater operator named Aron chairman of its board following the resignations of non-executive chairman Lin Zhang and Director Mao Jun Zeng.
After surging 24% on Tuesday, AMC stock (ticker: AMC) was down 0.4% to $42.92 in Wednesday trading. GameStop stock (GME) was down 1% to $189.25, while the S&P 500 index was up 0.6%.
Aron, who regularly communicates with the company’s retail investors via social media, posted on Twitter, “As CEO & President of AMC for 5 1/2 years, I am flattered that last night the AMC Board of Directors elected me to serve now as Chairman of the Board also (as well as CEO & President too). I will do my best to act with honor and distinction in these roles.”
Philip Lader was also tapped to be the board’s lead director. The former U.S. ambassador to the Court of St. James’s has been an independent director on AMC’s board since July 2019.
Zhang and Zeng are both senior executives at Wanda Group—the Chinese company that was a controlling shareholder in AMC between 2012 and 2020. Wanda Group exited its position in AMC in May. Wanda America Entertainment sold 30,445,290 AMC shares between May 13 and May 18 at an average selling price of $14.22, for a total of $426.9 million, according to filings with the Securities and Exchange Commission. In the following weeks, AMC shares hit as high as $72.62.
AMC and GameStop are both meme stocks, meaning their daily movements are often volatile and unpredictable. They generally are impacted by non fundamental factors like short seller activity, options volume, momentum trading, and online chatter. While AMC stock has fallen a bit in July, Tuesday’s surge took a cut out of short sellers, bringing year-to-date losses to $3.82 billion, according to data from S3 Partners.
Aron has stood out among meme stock chiefs through his efforts to appeal to retail investors on social media sites like Reddit. He’s unveiled a rewards program for shareholders and even appeared in interviews with YouTube commentators. He’s donated to their charity of choice: the Dian Fossey Gorilla Fund.
The company has cashed in on its meme stock status. Analysts at S&P Global Ratings upgraded the company’s debt by two notches to CCC+ in June, noting the company raised more than $1.8 billion in equity issuance so far this year. AMC canceled a shareholder vote on a proposal that would have allowed the company to issue 25 million more shares starting in 2022, pointing to investor sentiment. The company’s annual meeting is set for July 29.
Write to Connor Smith at [email protected]
