AMC CEO says retail investors saved company as parent Regal Cineworld files for bankruptcy

AMC ( AMC ) Chief Executive Adam Aron isn’t worried about rival Cineworld ( CINE.L ) filing for bankruptcy because, well, he has the “Monkeys” on his side.

The executive pointed to the positive impact of retail investors – self-dubbed “Monkeys” – fueling the stock during the COVID-19 pandemic. Aron emphasized that AMC is not in the same position thanks to small investors who “embraced” the company during that time.

“Fortunately, AMC is in a very, very different situation — because small investors have embraced us and let us raise a lot of cash,” Aron said. he tweeted.

Britain’s Cineworld Group ( CINE.L ), the parent company of Regal cinemas, filed for bankruptcy on Wednesday after struggling to recover from pandemic lows. The news, which was widely expected, comes after the Wall Street Journal reported last month that the theater chain was preparing to file in the US.

AMC, by contrast, has raised about $2.2 billion over the past two years, fueled by last year’s meme stock frenzy. AMC moved lower on news of Cineworld’s bankruptcy with shares down about 2% in early afternoon trading and trading just above a 52-week low.

Cineworld shares rose on the announcement, rising about 10% on the news.

“We have an incredible team across Cineworld that is laser-focused on evolving our business to thrive as the movie industry returns,” Cineworld CEO Mooky Greidinger said in a statement to Yahoo Finance.

“This latest process is part of our ongoing efforts to strengthen our financial position and seeks a deleveraging that will create a more resilient capital structure and efficient business. This will allow us to continue to execute on our strategy to rethink maximum immersive cinematic experiences for our guests through the latest and most modern screen formats and enhancements in our premier theaters,” the executive continued.

The Chapter 11 filing, which Yahoo Finance received, will allow the company to continue operations and restructure its operations to significantly reduce its debt and strengthen its balance sheet.

Cineworld, which operates more than 9,000 screens in 10 countries, is the second-largest theater chain after AMC ( AMC ) but has more than $5 billion in debt after losses accelerated during the pandemic.

Last month, the chain warned that a lack of big-budget films would likely affect attendance through the fall, further affecting its ability to reduce debt.

Film supply is expected to slow significantly this year due to pandemic delays and post-production supply chain issues.

The domestic box office has suffered as a result. So far this year, the annual box office is down about 30% compared to the same point in 2019, according to Comscore data.

Cineworld files for bankruptcy

Alexandra is a Senior Entertainment and Food Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at alexandra.canal@yahoofinance.com

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