Shareholders of AMC Entertainment are pressing CEO Adam Aron to initiate stock buybacks. AMC retail investors are always keeping a close eye on the analytics of the AMC stock, and recently have been pointing out that the shares on loan are higher than ever. As covered previously, the shares on loan have hit 163.41 million — the highest it’s ever been, with high short interest hitting 22.56%. AMC shareholdings believe that stock buyback are necessary to help boost the the share price of AMC Entertainment.
While AMC Entertainments most recent announcement that they purchased a 6% stake of the U.S Movie advertising company National CineMedia (NCMI) is good news for retail investors, it’s still not good enough and retail investors want more from AMC and Adam Aron. AMC retail investors, mostly knowns as AMC Apes, believe that it’s essential for AMC to initiate a stock buy back program.
WHAT IS A STOCK BUYBACK PROGRAM?
Companies often use share buyback programs to create a price increase. Often times a buyback will occur when a company feels that the current price of the shares are too low and the stock prices are undervalue. For the last year AMC shareholders have believed that the AMC stock price should be much higher. Reported AMC “glitches” seemingly prove this claim. Additionally the high short interest of AMC stock indicates that there may soon be a short squeeze as hedge funds are forced to close their short positions. A buyback is typically ideal for a company who has large amounts of unused cash
WILL AMC INITIATE A STOCK BUYBACK?
AMC is becoming closer and closer to their pre-pandemic levels and Adam Aron has made every effort to lead the once almost bankrupt company out of the dark. AMC recently has been playing offense by improving laser projectors, buying stakes in hycroft and National CineMedia, expanding payment options to cryptocurrency. CEO Adam Aron has set the motto “Recovery, Agility and Transformation for the popular movie theater chain and retail investors are holding him to it. It’s reported that AMC has about 1.59 in total cash, however according to Sean Goodman, the CFO of AMC, the company has plans do disburse the cash between three main segments — supporting operations, repaying high interest loans and deferred rent, and investing in growth of the company.
While implementing a share buyback program might not be at the top of the list for the company, we do know that Adam Aron strives to maintain a close relationship with AMC shareholders and typically likes to take their thoughts and ideas into serious considerations. As always, it’s important for AMC shareholders to spread the word and share information with other investors.