By Matt Grossman
Adam Aron, the chief executive officer of AMC Entertainment Holdings Inc. who has embraced the company's recent status as a darling of enthusiastic day traders, will also serve as the company's chairman, AMC said Wednesday.
Mr. Aron takes over as chairman from Lin Zhang, a senior executive at the Chinese company Dalian Wanda Group Co., which until recently was AMC's largest shareholder. Wanda Group sold most of its AMC shares two months ago after trading by individual investors contributed to an unlikely recovery in AMC's share price, following troubles stemming from the and a high debt burden.
AMC shares have surged since January, and Mr. Aron has leaned in to AMC's central role in the meme-stock trade this year, posting memes of his own on Twitter and addressing himself directly to some of the individual investors who hype up the company on Reddit and other social-media sites. Mr. Aron said in an April interview that he viewed the company's individual shareholders as "my bosses. They're who I work for."
Those shareholders, many of whom needle each other on social media not to sell AMC stock despite significant price moves, served as a financial lifeline for the company as it raced to raise funds while the public health crisis was jeopardizing its future.
Nine months ago, AMC was warning investors that it could soon run out of cash as the public health crisis devastated ticket sales. Even before the public health crisis struck, AMC had a significant debt load following a string of acquisitions. Shares closed as low as $1.98 on Jan. 5.
Then meme-stock traders began piling in, lifting AMC shares alongside those of GameStop Corp. and other trendy targets. At one point in late January, AMC shares rose 467% in 72 hours. Under Mr. Aron's guidance, AMC has used the opportunity to raise funds by selling more shares, slashing its debt load.
A sale of stock last month that raised $587 million was the seventh time in nine months that AMC brought more shares to the market.
The stock has continued to trade far above levels that seemed likely at the beginning of the year. It reached $60 last month and closed on Tuesday at $43.09, a greater than 1,900% increase year to date.
Mr. Aron has been AMC's CEO since 2016. Earlier, he had served as CEO of Starwood Hotels and Resorts Worldwide Inc., Vail Resorts Inc. and Norwegian Cruise Line Holdings, Ltd.
AMC also named Philip Lader, a board member since 2019, as its lead independent director. The appointment for Mr. Lader, a former U.S. ambassador to the U.K., follows the departure of Mao Jun Zeng, who like Mr. Zhang is a Wanda Group executive.
(END) Dow Jones Newswires
July 21, 2021 09:47 ET (13:47 GMT)
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