AMC Entertainment (NYSE:AMC) stock is plunging lower today, reaching a new 52-week and all-time low of $3.63 per share during intraday trading. One of the factors contributing to the price action is the weak 2024 box office caused by the lingering effects of the 2023 Writers Guild of America strike.
According to CEO Adam Aron:
There’s no denying that the 2024 box office has been weak thus far. The Beekeeper has been the highest-grossing film of the year, bringing in $122.52 million globally. Mean Girls tallies in at second place with $92.69 million, followed by Night Swim with $43.44 million. In comparison, Barbie was the highest-grossing film of 2023 with its worldwide box office of $1.44 billion, followed by The Super Mario Bros. Movie with $1.36 billion.
AMC Stock Reaches New All-time and 52-Week Low
While the total domestic box office in 2023 grew by 20.9% to $8.90 billion, marking the third consecutive year of growth, that’s still a far cry from the 2019 box office of $11.36 billion. The 2024 box office is expected to fall by at least $1 billion this year, which would mark a decline of 11% according to Deadline.
In 2023, the total worldwide box office reached $22.49 billion, down by 0.2% and much lower compared to the 2019 box office of $39.32 billion.
AMC stock has also been affected by dilution, which the company has enacted in order to pay down its debt. According to CompaniesMarketCap, AMC stock outstanding increased by 29.52% in 2023 after rising by 7.03% in 2022, 130.43% in 2021 and 116.02% in 2020.
After completing a $350 million at-the-market (ATM) offering in December, equivalent to 48 million shares, AMC went on to issue several million more shares in the following weeks. These shares were issued in exchange to a lender for AMC’s 10%/12% cash/payment-in-kind (PIK) toggle second lien subordinated notes due in 2026, which is a form of debt.
In a world increasingly dominated by streaming, the outlook doesn’t look too favorable for AMC. The company needs to navigate a path to reduce its debt without harming shareholders while also attracting more viewers to its theaters.
On the date of publication, Eddie Pan 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.
