AMC Belongs to the People Now

We’re nearly halfway through the year and it looks like the meme stocks haven’t ended their run just yet: As of Wednesday, shares of movie theater chain AMC Entertainment were up as much as 3,200 on the heels of a newly launched initiative to provide free popcorn to shareholders.

AMC’s stock price nearly doubled on Wednesday alone following the release of what the company has dubbed its Investor Connect initiative, which promises shareholders access to exclusive benefits like free movie snacks and invites to special screenings. This gimmick seems to have paid off in a major way: In a press release announcing the Investor Connect initiative, AMC CEO Adam Aron said that retail investors now own a supermajority of the company’s shares, “more than 80% … at last count.”

Even as AMC’s stock price soared, hedge fund investors and short sellers were calling its bluff, cautioning that the company’s shares were massively overvalued. On Tuesday, financial consulting firm Mudrick Capital told Bloomberg that it had sold its entire stake in the company for an undisclosed profit, just months after pulling in a profit to the tune of tens of millions of dollars from its purchase of AMC bonds and options.

AMC, for its part, seems unperturbed by the lack of institutional support; in fact, its entire strategy as of late seems predicated upon attracting the support of the same Average Joe investors that sent share prices skyrocketing from $4.95 to $20.36 overnight in January 2021.

“We intend to communicate often with these investors, and from time to time provide them with special benefits at our theaters,” Aron said in the release. “We start with a free large popcorn on us, when they attend their first movie at an AMC theatre this summer.”

Aron’s pivot to embracing the support of retail traders isn’t exactly new, either. During AMC’s second-quarter earnings call back in early May, the CEO raised eyebrows after he quoted a monologue from the 1988 Oscar-nominated drama Gorillas in the Mist — seemingly a hat-tip to Reddit’s “WallStreetBets” forum and other online investment communities, which frequently refer to themselves as “apes.”

In a less cryptic pronouncement, Aron also said outright that AMC’s health was dependent on the support of its retail investors.

“These individual investors likely own a majority of our shares, they own AMC,” Aron said on the earnings call. “We work for them. I work for them. By definition, their interests and passions are important to AMC, their ambitions and passions are important to me.”