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AMC Theatres Leads With Innovative Shareholder Engagement

AMC Theatres (“AMIC”), the theatre chain and “meme stock”, has seen its share price rocket over the past year as retail investors have snatched up shares in the company. In fact, according to AMC’s investor relations website, more than 80% of AMC’s shares are held by a broad base of retail investors with an average holding of around 120 shares.

On its Q2 2021 earnings call, AMC took steps to cater to this new audience who have a much different set of investing principles than the average “sophisticated” investors it is used to dealing with. According to CEO, Adam Aron, over 10,000 retail investors dialed into the call and AMC allowed those investors to submit and upvote questions with the greatest shareholder interest. In another unorthodox approach, these questions were prioritized over analyst questions (of which there was one).

The COVID-19 pandemic put an end to the in-theatre experience. We don’t think anyone, especially Aron and AMC’s CFO Sean Goodman, thought their company’s stock price would ever be of interest to such a large swathe of investors, however, the way the company has pivoted and engaged with its investor base is nothing short of remarkable.

As Aron noted on the call:

“Many of our new individual investors have showered us with great ideas about how we can strengthen and brighten the future of AMC. Among their ideas for AMC are that we show concert movies, professional sporting events, e-sports, and gaming events.” 

It is this kind of engagement and interaction with the company which gives shareholders trust in the management and renewed hope in the theatre chain.

In a refreshing change from the more mundane, albeit necessary, questions posed by analysts, some of the questions asked by the retail investors were much more practical business questions which is atypical on your average earnings call:

  • How is AMC preparing for a possible large-scale COVID surge that could potentially shut theatres down again?

  • How does AMC plan to combat day and date releases of movies on streaming platforms and theatres?

  • Would AMC ever consider re-establishing drive-in theatres?

The final question led to an in-depth response from Aron about the economics of the drive-in theatre and why it wouldn’t be a sensible business decision.

Some of the other questions were maybe not as profound including:

  • I promise not a sarcastic question, but can you guys make the AMC mascot officially a gorilla? (As AMC stockholders refer to themselves as ‘apes’).

Later in the call, Aron said that he had returned to Twitter in order to “give me a more sophisticated and better understanding of what’s on the minds of AMC’s new owners.”

AMC have done a great job of listening to its investors, keeping them engaged and onside. They also recognize that their investors bring novel ideas that could benefit the chain. Whether this shareholder interest and newfound publicity that AMC finds itself in translates to healthy financial performance in the future remains to be seen but, as a pioneer in engaging and listening to its shareholders, AMC is certainly leading the pack.

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