Many CEOs of major companies are not active on Twitter—if they use social media at all. Adam Aron, the CEO of AMC Entertainment, however, has not only rejoined Twitter after a long hiatus, but has also become a meme lord.
Retail investors on Reddit continue to pump up the stock price of the move theater chain, and now Aron is publicly declaring his allegiance to those millions of shareholders. “They own AMC,” Aron said on an earnings call last week. “We work for them. I work for them.”
AMC’s stock has jumped 66% to more than $14 in the last week—its longest streak of growth in three years. Traders on the r/wallstreetbets subreddit are in the midst of yet another round of buying up the once-troubled stock in order to force the short sellers who bet on its demise to cover their losses. These Reddit investors, who call themselves “apes,” (based on the “apes together strong” line from the Planet of the Apes franchise), have now given Aron the nickname of “Silverback.” The first line of the CEO’s Wikipedia entry reflects his new title.
The newfound frenzy surrounding AMC encouraged Aron, who’s been the company’s CEO since 2015, to get back on social media and welcome the madness. After not tweeting since June of 2020, Aron returned to Twitter in April and now tweets almost every day, usually with messages of support to the apes. If he’s not retweeting anonymous investors, he’s surfacing their memes or thanking them for their campaign to #SaveAMC.
On the company’s earnings call, Aron revealed AMC had more than 3 million individual shareholders who owned more than 80% of its 450 million shares as of March 11. AMC postponed its annual shareholder event to July specifically “so that we could give our current investors the opportunity to make their important voices heard,” Aron said.
“Just go on Twitter, just go on Reddit, just go on YouTube, read what these people write. They love AMC…I love the idea that we have a compassionate, committed, enthusiastic shareholder base,” Aron added. Aron donated $50,000 to the Dian Fossey Gorilla Fund, a charity that protects endangered gorillas—a sum AMC matched, he said.
Wall Street is not as smitten with AMC as Aron and the apes. The consensus stock price target for AMC is only $4. Some analysts argue it’s worth even less than that. Even before the pandemic, AMC was struggling to attract moviegoers at the same rates it was used to due to consumption habits shifting away from the theater and toward internet platforms. Covid-19 then forced the chain to temporarily close its 1,000 theaters—most of which have since reopened, but with limited capacity (and, thus, limited revenue).
AMC also still has a mountain of debt (more than $5 billion) and continues to bleed cash as consumers remain hesitant to return theaters en masse. Aron said AMC has enough cash on hand to stay liquid until 2022, but it badly needs a rejuvenated global film market in order to pay off more of its debt and hit revenue targets.
The apes have helped—AMC’s surging stock price allowed Silver Lake Partners, a private equity firm to which AMC is indebted, to convert $700 million in corporate bonds into AMC stock. But it’s unclear how much more they can materially impact AMC’s finances. The best way for the apes to support AMC and their “Silverback” leader might be to actually go see a movie in a theater.