The Chinese are pulling up stakes in the US movie theater business, with the announcement that the Wanda conglomerate is selling off the controlling interest in the AMC Theatres chain that it has held since 2012. In January, Wanda traded in its Class B stock for Class A common stock, with the option to cash out.
The final divestment came this week when AMC reported that Wanda sold off another $426.7 million in stock, leaving it with a meager 10,000 shares in the theatrical chain. An earlier sale for $220 million was recorded last month.
At least one person is pleased with the transactions. AMC’s chief executive Adam Aron, who saw his company’s stock jump tenfold so far this year—from $2 a share to $20+ in a matter of weeks. Aron was quoted in The Hollywood Reporter earlier in May as declaring what the deal has meant to the 3 million individual investors who won AMC stock.
“These individual investors likely own a majority of our shares, they own AMC. We work for them. I work for them, By definition, their interests and passions are important to AMC, their ambitions and passions are important to me.”
Analysts in the investment sphere credited fallout from the Reddit phenomenon in January as contributing to the boost in AMC’s market position. On May 21 The Wall Street Journal’s Kimberly Chin commented that “the theater chain’s shares have skyrocketed 160% in the past 12 months, buoyed by a Reddit-fueled frenzy that started with the video game retailer GameStop Corp. And bolstered the fortunes of other companies affected by the pandemic, including AMC.”
According to a release from AMC, both Lincoln Zhang and John Zeng will be resigning their seats on the AMC board of directors within the next month. AMC is the largest movie theatre circuit in the United States and the largest movie theatre circuit across Europe, with additional theatres in the Middle East, says a company release, which added that “even after the stock sale, Wanda Film Group and AMC will enter into a long term strategy and cooperation agreement, which will facilitate efficiencies through global purchasing efforts and the sharing of best practices.”
The theater chain reiterated that some of the films made by Wanda will also be shown at select AMC Theatres, adding that “this continuing communication between the two companies should create a win-win situation for both Wanda Film Group and for AMC in the cinema and film industries.”