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AMC Flipped What Could Have Been A Faddish Blip Into A Substantial Financial Boost


Meme stocks are the stock market trend of the moment. You might recall GameStop's meteoric rise. From the Planet Money podcast, Erika Beras tells us how AMC Theatres flipped what could have been a faddish blip into a substantial financial bump for the company and a little something extra for those investors.

ERIKA BERAS, BYLINE: A few months ago, Kimberly Brooks was messing around on her phone in the break room at her job at a steel mill in Indiana.

KIMBERLY BROOKS: And then one of my friends happened to see something about AMC in the long list of things that you can invest in. And I was like, well, yeah, that's a good bet because it's definitely going up.

BERAS: AMC Theatres, the largest movie theater chain in the country. She'd never bought stock, but she loves the movies. So Brooks picked up a hundred shares at just over $7 apiece. That's despite the fact that AMC Theatres had been pretty close to bankruptcy. For Brooks, it wasn't just about buying stocks in a company she believes she's saving.

BROOKS: I did not think the stock market was for me or for anybody less than, you know, $300,000-a-year job. But when there's something in my hands that I got to do is push a button, it makes you feel very empowered.

BERAS: In a recent SEC filing, AMC said that more than 80% of its shares are held by, quote, "a broad base of retail investors," people like Kimberly Brooks. Some CEOs may lay low as their stock gets traded by so many new investors, but AMC's CEO, Adam Aron, is into it, even appearing on a YouTube show hosted by one.


ADAM ARON: And I know, sure, there are some people who are in it only for a buck. But I also know for a fact that a lot of our retail investors rallied around AMC not only because they hope to be a profitable investment but because they actually have an affection and an allegiance.

BERAS: The company took that allegiance and the skyrocketing stock price to the bank. Reena Aggarwal is a finance professor at Georgetown University.

REENA AGGARWAL: So they took advantage of that situation.

BERAS: Normally, when a stock is traded, money doesn't go directly to the company. But in this case, AMC decided to issue more shares and sell them into the market, taking advantage of their sky-high stock prices. The new shares raised over a billion dollars that did go to the company. At the same time, in an effort to keep any shareholders from selling, AMC's continued to court those new investors - offering a free popcorn at any of its theaters to shareholders - at a pivotal moment for the company.

AGGARWAL: People haven't been able to do anything for more than a year. They haven't been able to go to theaters for more than a year. And now things are opening up.

BERAS: It's a loop. Retail investors are happy, keep their shares. The company uses that valuation to keep raising money as long as shares stay high. And that doesn't always happen. Last month Kimberly Brooks, the AMC stockholder in Indiana, went with her four kids to see "A Quiet Place Part II" at an AMC theater. While there, she talked to the manager.

BROOKS: I told them, you know, I was a stockholder and, you know, you got to listen to me because I'm your boss now. And we just had so much fun going back and forth on the AMC stock, and he walked me to the counter to get my popcorn.

BERAS: Her free popcorn - since that visit, Kimberly Brooks has picked up five more shares of AMC stock. Now she owns 316.

For NPR News, I'm Erika Beras.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.

Erika Beras
Erika Beras (she/her) is a reporter and host for NPR's Planet Money podcast.