CEO Adam Aron of AMC Entertainment (NYSE:AMC) offered to freeze his pay for 2023. AMC stock, formerly a popular meme trade, lost 85% of its value this year.
The offer was made in a tweet. Small shareholders who responded were not amused, noting Aron sold millions of the company’s shares as their value fell.
Aron also told senior officers to forego pay hikes next year, but said employees may still get raises. “My motives are pure,” he wrote in another tweet.
Tweet Me a River
Before the Covid-19 pandemic began in 2020, AMC was a profitable $5 billion-per-year enterprise, even offering a dividend whose yield topped 10% at one point. But the pandemic wrecked the business. Over the last three years, the company has lost billions.
It might already be bankrupt save for retail investors who made it the heart of the meme stock trend in 2021. This sent shares above $50. AMC stock currently trades for less than $4.
Aron leaned into the craze, issuing stock to sustain the losses, including preferred shares under the symbol APE (NYSE:APE). These opened Dec. 28 at about $1.70. Aron also got AMC into the non-fungible token (NFT) business.
Retail investors who rode the wave but refused to sell AMC stock after it crested remain furious with Aron’s antics. On Dec. 28, traders on Stocktwits were laughing at the losers. Those at r/Wallstreetbets, the Reddit forum that was once the heart of the rally, cheered on the bears.
I wrote the party was over for AMC in January and recently reported on market fears that AMC might go bankrupt. Rival Cineworld (OTCMKTS:CNWGQ), which owns the Regal Theater chain, filed for bankruptcy in September.
What Happens Next for AMC Stock?
The movie industry, which was built by theater chains a century ago, now desperately needs to keep theaters alive. They’re essential for big-budget projects like the new Avatar: The Way of Water. The $9-per-seat average ticket price is huge compared to what a movie can make with streaming.
How the industry squares this circle will be one of the big stories of 2023. AMC will be in the thick of it, but retail investors shouldn’t expect a profit.
On the date of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.