Movie theater chain AMC Entertainment announced Wednesday morning the appointment of CEO Adam Aron—a leisure industry veteran who’s embraced AMC’s emphatic crowd of retail investors—as its new board chair, replacing an executive at billionaire-controlled Dalian Wanda Group, which sold off nearly all its stake this year amid the unprecedented rise in AMC’s stock price.
In a Wednesday release, AMC announced the board resignations of Beijing investment firm Dalian Wanda Group’s Lincoln Zhang and John Zeng, who stepped down on July 20 and July 15, respectively, after announcing their intent to do so in May.
Following the resignations, the board appointed Aron, who’s helmed AMC as president and CEO since 2016, as chairman on Tuesday, according to a regulatory filing.
The firm also appointed Philip Lader as its board’s lead director; Lader serves as a senior adviser to Morgan Stanley, which AMC enlisted this year in a stock offering of $500 million.
AMC shares were virtually flat at $43 in pre-market trading Wednesday after soaring nearly 25% Tuesday, paring back losses from a nearly 45% crash since last month.
AMC reached its record high in June on the day Aron touted an “extraordinary base of enthusiastic and passionate individual shareholders.” One day later, the company raised $587 million from investors by selling nearly 11.6 million shares at an average price of $50.85. The firm simultaneously cautioned against the investment, saying that “under the circumstances,” people should only buy into the stock if they are “prepared to incur the risk of losing all or a substantial portion” of their investment.
Despite the resilient retail interest, former controlling shareholder Wanda Group, the investment firm helmed by Chinese billionaire Wang Jianlin, nearly closed out its AMC stake at the end of May. It sold about $430 million in shares over a one-week period—nine years after taking control of the company in a $2.6 billion deal. The firm hasn’t commented on the matter, only saying it isn’t a result of a disagreement with AMC executives.
AMC share prices have crashed about 30% since the company’s June stock sale but are still up more than 2,000% this year.
What To Watch For
AMC’s annual shareholder meeting will be held on July 29, and its next earnings release is expected in early August. Either of those events could shed more light on how AMC plans to invest its recently raised cash. Earlier this month, Aron announced two long-term leases at luxury shopping malls in the Los Angeles area, calling them “no ordinary theatres” and teasing more additions to come.