In recent months, many of the hottest “meme stocks” of 2021 have plummeted. Despite the excitement going into the early part of the year, we’ve seen many of these companies slowly lose steam, despite more people than ever paying attention to these types of stocks. This includes AMC Entertainment (NYSE: AMC), whose shares were down just before the weekend. As it turned out, some of the company’s top executives are selling the stock, triggering a wave of paranoia and skepticism among shareholders.
AMC CEO Adam Aron sold over $9.7 million worth of AMC shares. It’s not a surprise by any means, as he warned investors that he’d be selling some of his shares back in August. In total, he sold over 312,000 shares for around $31 apiece, as revealed in a regulatory filing last week. Before that, Aron sold another $25 million worth of shares.
However, perhaps even worse than AMC’s CEO selling his stock, AMC’s CFO unexpectedly decided to sell his stake as well. The executive ended up selling every one of his AMC shares for around $565,000. Representatives at AMC declined to comment when reporters were asking questions about the situation.
As expected, traders quickly reacted to the news. Wall Street analysts also chimed in on the development, raising a cautious point about what this means for the company going forward.
“I think that while Adam Aron clearly communicated his intent to liquidate some of his position in AMC shares by year-end, many investors were caught off-guard by the extent to which he sold shares between early November and mid-December,” said Alicia Reese, an analyst at Wedbush. “Sean Goodman of course already has more shares since he sold in November, and all of the executives will continue to accumulate more shares as part of their compensation packages, but they’re walking a fine line by cashing in on the elevated share price while the retail shareholders have committed to holding at all costs.”
Shares of AMC were down around 9.5% following the news just before the weekend. Prior to this massive influx of new investors, AMC was trading at around $5 to $10 per share, before falling as low as $1.9 back in January when the cinema giant was on the verge of bankruptcy. Despite being heavily in debt and struggling with cash flow, the rapid deployment of vaccines led to a surge of movie-goers just in time for the Summer. Right now, shares are trading at roughly $27.5.
AMC is one of those stocks that’s heavily correlated to any adverse coronavirus news. We saw share prices plunge as Omicron news continued to fester. However, this new development from AMC’s management team could continue to push prices down throughout this week as well, perhaps even up until 2022.
AMC Entertainment Company Profile
AMC Entertainment Holdings Inc is involved in the theatrical exhibition business. It owns, operates or has interests in theatres located in the United States and Europe. It provides best-in-class amenities such as plush, power recliners, MacGuffins full bars, AMC Dine-In Theatres, premium presentation. The group operates in U.S. markets and International markets. – Warrior Trading News
