AMC Stock Tumbles as Movie Theater Chain in Advanced Talks to Refinance Debt: Report
People walk past an AMC and IMAX movie theater in the theater district in New York.
Angela Weiss / AFP via Getty Images
Shares of AMC Entertainment were dropping for the ninth consecutive trading session Tuesday, following a report that said the cinema chain was in talks to refinance its debt.
Earlier this month, AMC (ticker: AMC) CEO Adam Aron said his goal for the year was to refinance some of AMC’s debt. The company took on debt at high interest rates in 2020 and early 2021 to survive the coronavirus pandemic, when stay-at-home orders prevented and discouraged moviegoers, Aron said.
The company is currently in advanced talks to refinance that debt, The Wall Street Journal reported. AMC is targeting some of its bonds that carry especially high interest, a person familiar with the matter told the Journal.
AMC had about $1.7 billion in current liabilities, in addition to $5.5 billion in corporate borrowings and lease obligations as of Sept. 30, according to a third-quarter filing. These include a senior secured credit facility-revolving credit facility due 2024 at a 10.75% interest rate, and first lien notes with interest rates at 10.5% due in 2025 and 2026.
Shares of AMC surged following the a meme-stock rally in early 2021, but have sunk 42% this year, outpacing wider market losses as investors grow even more wary of meme stocks like AMC and GameStop (GME).
David Trainer, CEO of investment research firm New Constructs, said in a note Tuesday that the stock market’s declines suggest investors are placing more emphasis on profits and valuations than speculation.
“Investing in meme stocks carries reckless and unnecessary risk, which puts an investor’s portfolio in danger of potentially devastating declines,” Trainer said.
AMC stock was down 2% to $16.30 on Tuesday. GameStop was up 0.1%.
Write to Sabrina Escobar at [email protected]
