AMC Entertainment Holdings Inc.'s (NYSE: AMC) stock surged this week for the first time since retail investors rallied around the movie theater chain in 2015 when Adam Aron took over as CEO and made three major acquisitions that collectively cost about $3 billion.
AMC acquired theater chains Carmike, Odeon and Nordice, significantly expanding AMC's theater network but also increasing its debt load. The windfall - AMC's stock price soared by 121% in premarket trading on Tuesday - could allow AMC to pay down its substantial debt.
The theater chain has paid down nearly $1 billion of its debt since the start of 2022 but about $4.6 billion remains. About $20 million of AMC's debt is due in 2024 and $118 million in 2025. But the $2.96 billion owed in 2026 will require attention, Wedbush analyst Alicia Reese told CNBC.
"I think they'll be able to renegotiate a portion of it, but a lot of it's probably just going to get extended maturities," Reese said.
AMC shares are trading lower on Wednesday. The company announced it negotiated agreements to issue 23,280,295 shares of its Class A common stock in exchange for $163.85 million aggregate principal of its 10%/12% Cash PIK Toggle Second Lien Subordinated notes due in 2026.
By May 14, AMC shares had more than doubled since the market closed on Friday after Roaring Kitty posted online for the first time in nearly three years. Roaring Kitty, whose legal name is Keith Gill, on Sunday posted a meme of a man leaning forward in his chair while playing video games, suggesting he is paying closer attention to the GameStop Corp. (NYSE: GME) and markets in general.
After skyrocketing more than 130% earlier this week, shares of GameStop were down 9% to $44.17 in premarket trading on May 15.