AMC climbs 9% as CEO makes pledge not to sell newly authorized shares this year

adam aron, AMC CEO
AMC CEO Adam Aron.

  • AMC climbed as much as 9% on Thursday after its CEO said the company won’t sell any of the 500 million shares its seeking to authorize.
  • Adam Aron said if the company needs to raise short-term cash it still has some shares left from a prior authorization.
  • AMC, which has been a popular meme stock, is now up more than 365% in 2021.
  • See more stories on Insider’s business page.

AMC Entertainment shares climbed as much as 9% on Thursday after CEO Adam Aron said it will not sell in 2021 any of the 500 million shares it’s asked investors to authorize.

The company’s shareholders will vote on May 4 on whether to approve AMC’s request to increase its number of shares outstanding, which Aron plans to deploy in the coming years.

“We hereby pledge at AMC that if the shareholders approve this authorization for 500 million new shares to be issued, we will not use one of those 500 million shares in calendar year 2021. Not one,” CEO Adam Aron said in an interview published Wednesday on a YouTube program called Trey’s Trades, hosted by an independent investor.

AMC included Aron’s comments in a Thursday filing with the Securities and Exchange Commission. The company has roughly 450 million shares outstanding, according to Bloomberg.

The movie-theater operator has been working to recover from the hit the business took from the COVID-19 pandemic. The chain recently started to reopen its theaters after they closed to help reduce the spread of the respiratory disease.

Aron said in the YouTube interview that AMC still has about 43 million shares outstanding that were authorized in 2013. The company could use those shares to raise cash in the short-term if needed but that no decisions have yet been made on that matter, he said.

Asking for authorization to issue 500 million shares is part of the company’s preparation for operations on a longer-term basis, Aron said.

“If you give us the flexibility to use those shares when it makes sense for you, the shareholder, that’s when we’ll use them and not before,” said Aron.

AMC stock has surged from about $2 at the start of this year in part during major short-squeeze rallies that were fueled by retail investors active on Reddit’s Wall Street Bets forum. Shares are up more than 365% year-to-date.

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Regal Cinemas will reopen in April as new releases ramp up. Here’s how the company grew to be the second-largest theater chain in the country.

Regal Cinemas NYC
A Regal Cinemas remains closed during the coronavirus pandemic on May 3, 2020 in New York City

  • Regal is planning a phased reopening of more than 500 US theaters in April.
  • The theaters will open to play “Godzilla vs. Kong” and “Mortal Kombat.”
  • In October, Regal closed US theaters indefinitely due to the pandemic and a lack of new releases.
  • Visit Business Insider’s homepage for more stories.
Entrepreneur Mike Campbell started Regal Cinemas in 1989. It was headquartered in Knoxville, Tennessee, in an old warehouse, according to a contemporaneous Associated Press article.

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Regal.

Source: AP

The company’s first theater was in Florida, where Campbell renovated an already existing theater with new carpets, concessions, and screens, more than doubling its size.

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Regal theater.

Regal theaters grew, especially in the suburbs, and were known to be relatively upscale compared to competitors, with cafes selling cappuccinos and cookies inside. By 1995, Regal was the ninth-largest movie theatre chain in the US.

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Regal theater.

Source: The Baltimore Sun, AP

In 2001, with nearly 4,000 screens across 328 theaters, Regal became one of several theater chains to declare bankruptcy.

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Regal theater.

Source: The New York Times

In 2002, Denver billionaire Philip Anschutz became the majority owner in Regal Cinemas, United Artists Theaters, and Edwards Theaters, combining them all under the new parent corporation Regal Entertainment Group.

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Philip Anschutz.

Source: The New York Times

In 2008, Regal Entertainment acquired Consolidated Theatres, a movie chain with locations in mid-Atlantic states. The Department of Justice required Regal to divest some theaters in areas where it would otherwise have a monopoly.

Department of Justice Building
Department of Justice.

Regal was one of many companies to downsize in 2011, laying off many managers and projectionists to better compete with Netflix and Redbox.

regal cinemas
Regal.

Source: Hollywood Reporter

European chain Cineworld bought Regal in 2017 for $3.6 billion, making it the second-largest movie theater chain in the world.

FILE PHOTO: A Cineworld cinema logo is pictured in Canary Wharf in London, Britain, March 11, 2020. REUTERS/Keith Weir/File Photo
FILE PHOTO: A Cineworld cinema logo is pictured in Canary Wharf in London

Source: CNN

The coronavirus pandemic hit Regal and all movie theaters hard, forcing Regal to close al its theaters indefinitely beginning March 17.

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A man cycles past a shuttered movie theater in Times Square following the outbreak of coronavirus disease (COVID-19), in the Manhattan borough of New York City, New York, U.S., March 17, 2020.

Source: Business Insider, Regal

Theaters began reopening throughout the summer according to local regulations, with social distancing measures keeping attendance low.

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Regal.

Regal announced in October it would close all 536 US theaters and 127 UK theaters.

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Regal theater.

In the press release, CEO Mooky Greidinger cited the lack of blockbuster releases that could potentially sustain theaters. The previous week, MGM pushed back the release of the James Bond film “No Time to Die” from November until next April.

No Time to Die UA

Source: Business Insider

Spiking COVID-19 cases in New York City reintroduced stricter measures for indoor gatherings. “Despite our work, positive feedback from our customers, and the fact that there has been no evidence to date linking any COVID cases with cinemas, we have not been given a route to reopen in New York,” Greidinger said.

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Regal theater.

Source: Cinemark

The closures affected more than 45,000 jobs in the US and UK, and Cinemark’s share prices dropped by more than a third since the announcement.

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Regal theater.

Source: Business Insider

Cineworld says a limited number of theaters will open on April 2 to screen “Godzilla vs. Kong.” Then on April 16, “Mortal Kombat” will be screened at even more theaters.

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“Godzilla vs. Kong.”

Source: Insider

Cineworld CEO Mooky Greidinger says the chain will be able to operate profitably in larger markets now that most states are allowing movie theaters to open to at least half capacity.

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Movie theater reopening.

Source: Insider

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Which activities are safe once you’re fully vaccinated? Experts say movies, travel, and family gatherings are on the table.

A recently reopened movie theatre.
A recently reopened movie theater.

  • The US has authorized three COVID-19 vaccines.
  • Public-health experts say it’s probably safe for vaccinated people to meet for dinner or gather indoors.
  • Some experts think vaccinated people can even return to offices and movie theaters or see their unvaccinated grandkids.
  • Visit the Business section of Insider for more stories.

So you’ve received both doses of a coronavirus vaccine. Does life change a little – or a lot?

The Centers for Disease Control and Prevention is expected to release guidelines this week detailing how Americans can safely alter their behavior once they’re fully vaccinated. But the rules are complicated by a few unknowns – namely, the extent to which vaccinated people can pass the virus to others and the threat of contagious variants that may evade vaccine protection.

So far, Pfizer and Moderna’s clinical trials have only tested whether vaccines prevent symptomatic COVID-19 cases. But emerging evidence suggests the vaccines can reduce coronavirus transmission as well. Johnson & Johnson’s COVID-19 single-dose vaccine also seems effective at reducing transmission, according to recent data.

Without more research, however, public-health experts caution that vaccinated people should continue to wear masks and social distance in public. Here’s what seven experts think are safe activities for vaccinated people. 

Dinners with other vaccinated people are relatively low-risk

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Women sit inside a bubble tent at the Cafe Tirree in Berlin, Germany, on October 24, 2020.

Dinners with other vaccinated people, whether indoors or outdoors, are a relatively safe activity.

“If we’re going to gather, we should gather smart, which doesn’t mean to have a 200-person wedding with people that you don’t know right away,” Dr. Dara Kass, an emergency-medicine physician at Columbia Medical Center in New York, told Insider. “Start, maybe, going out to dinner with a couple that is vaccinated, or your parents, maybe seeing them for a nuclear family dinner that you have been avoiding.” 

In general, interactions between people who are fully vaccinated – or immune due to a previous infection – are relatively low-risk for all parties involved, according to Florian Krammer, a vaccinologist at the Icahn School of Medicine at Mount Sinai.

“We need to be cautious and need to stay vigilant about risk,” he recently wrote. “But we should also allow people who have immunity to at least normalize some of their interactions.”

Small indoor gatherings aren’t such a bad idea, either

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A family celebrates Thanksgiving on November 24, 2016 in Stamford, Connecticut.

At a White House press briefing on Monday, Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said “doubly vaccinated” people – those who have received both doses of either Pfizer or Moderna’s shots – can safely gather indoors in small groups.

“I use the example of a daughter coming in from out of town who is doubly vaccinated, and a husband and wife doubly vaccinated, and maybe a next-door neighbor who you know are doubly vaccinated,” he said. “The relative risk is so low that you would not have to wear a mask.”

The new CDC guidelines will also advise that vaccinated people can host small, at-home gatherings with other fully vaccinated people, two senior White House officials involved in drafting the rules told Politico.

Dr. Peter Hotez, a molecular virologist at Baylor College of Medicine in Texas, said he plans to visit his two oldest children and their spouses for the first time in 14 months this weekend. All of them have either been vaccinated or contracted COVID-19, he wrote

Elderly people can see unvaccinated grandkids – with caveats

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Husband and wife Vic and Penny Griffiths receive the Pfizer vaccine at Basildon University Hospital in Essex, England, on December 9, 2020.

Many elderly Americans have said they plan to see their children and grandchildren post-vaccination. If all adults in a family are vaccinated, such a gathering becomes “fairly low risk,” according to Dr. Céline Gounder, an infectious-disease physician at New York University. That’s because coronavirus infections are generally mild or asymptomatic in children

“What concerns me is the people who are not yet vaccinated,” Gounder told Insider. “For example, you have three generations in a family: vaccinated grandparents, but not children or adults. That could still be a real problem.”

Kass also said it’s probably safe for elderly, vaccinated people to see their unvaccinated grandkids.

“My parents are vaccinated, which means that my kids can go visit my parents with a sense of relief that we haven’t had before,” Kass said.

Kids under 16 likely won’t be eligible to receive a shot until at least the fall or winter, or perhaps even early 2022. 

Domestic travel is relatively safe

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Passengers wear masks as they walk through Los Angeles International airport.

The CDC may offer new travel guidelines for vaccinated Americans this week, but at the White House briefing on Monday, CDC Director Rochelle Walensky said “the goal is not to sort of open up travel” just yet.

For now, the CDC recommends that all Americans avoid domestic travel, if possible. For those who have been vaccinated, the agency suggests waiting to travel until at least two weeks after your second dose.

In general, however, experts say it should be fine for vaccinated people to travel within the US.

“If someone who is fully vaccinated decides to take a trip for non-essential reasons, they’re probably very well protected themselves and probably relatively protected against spreading the illness, too,” Dr. Leana Wen, the former health commissioner of Baltimore, told Insider.

Vaccinated people could potentially return to offices 

movie theater social distancing
Moviegoers social distance at the AMC Highlands Ranch 24 in Highlands Ranch, Colorado on August 20, 2020.

Experts say most indoor activities wouldn’t be particularly risky if limited to vaccinated people only.

“For a fully vaccinated person who is in a cohort or socializes with other fully vaccinated people, I see it as being completely reasonable to go back to the theater and would even encourage people to see movies,” Dr. Daniel Griffin, a clinical medicine instructor at Columbia University, told Insider. 

But the risk of transmission and infection would increase substantially if unvaccinated people join the activity.

“Could you return to the office, if it’s only people who have been vaccinated who are in the office? I think that is fine,” Gounder said. “Where it becomes more complicated is if you have a mix.” 

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AMC extends 2-day rally to 36% with NYC movie theaters set for partial reopening in March

AMC kiosks

Shares of AMC Entertainment extend their two-day rally to 36% after New York Governor Andrew Cuomo announced Monday that New York City movie theaters are set for partial reopening on March 5.

Cuomo said theaters are only allowed to operate at 25% capacity, or up to 50 people, per show. The governor also noted that assigned seating, social distancing, and other health precautions would be in place.

“We are excited to announce that AMC, the largest movie theatre exhibitor in New York City, will reopen all 13 of our theatres in New York City beginning March 5,” said Adam Aron, CEO of AMC, in a statement

Aron noted that since reopening their theaters in August 2020, they have welcomed nearly 10 million moviegoers “without a single reported case of COVID-19 transmission.” 

Theaters in New York City have been shut for nearly a year in a bid to curb the spread of the virus. Movie theaters in the state, meanwhile, have been open for some time at limited capacity, as well as in other parts of the country. 

The recent move to welcome back moviegoers comes amidst the governor’s effort in repoening certain parts of the state to revive the economy from opening the doors of Barclays Center to Madison Square Garden.

Not everyone, though, is pleased. An employee at Madison Square told Insider that she was shocked by the swiftness of the governor’s announcement and argued that she would need a couple more weeks for her vaccine to fully take effect.

AMC, the world’s biggest movie-theater company, has seen its stock price skyrocket and plummet in the past weeks as Reddit traders targeted the company, along with GameStop, by buying large volumes in an attempt to squeeze hedge funds shorting these. 

Apart from that, investors have reallocated their portfolio into so-called reopening sectors from travel to leisure and entertainment since signs of success from various COVID-19 vaccines began to appear.

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