A frenzied rally that began with video-game-retailer
"I was completely oblivious to
In late January a group of renegade individual investors banding together on the Reddit forum WallStreetBets turned their attention to AMC following their successful campaign to pump up the stock of
In the span of 72 hours, AMC's stock soared 467%. The hashtag #SaveAMC proliferated on social media, attached to memes showing images of AMC theaters superimposed on the surface of the moon -- a symbol that Reddit traders use to represent their aspirations of the stock reaching stratosphere-busting heights. The mania helped AMC bag another
What happened to AMC is a testament to a new force in financial markets: small-time investors whose collective power, often fueled by social media hype, can help determine a company's fate.
The unexpected assistance capped a drive by
There were also traders who cited an emotional attachment to AMC. "For the nostalgia of, essentially, America, you hope that theaters would recover, especially AMC," said
'Do what you need to do'
AMC's drama began in
As the virus began its world-wide spread, public officials restricted gatherings and people avoided indoor crowds. AMC shut down all of its roughly 1,000 theaters world-wide and furloughed most of its roughly 30,000 employees. The sharp downturn in theater attendance accelerated the shift to streaming, causing
The crisis roiled a 101-year-old company with a storied history in the world of movies. AMC introduced the multiplex in 1961 and the cupholder armrest in 1981 while also promoting stadium-style seating.
AMC's leaders took several actions to try to protect the company as revenue dried up. New CFO
The overall response from members of
When AMC turned to potential investors at large institutional funds, most responded that they were biding their time and waiting to get more understanding of the unfolding pandemic and the government's response to it before they considered deploying any investment to help the company.
A new financing opportunity developed in April when the
It wasn't. Even after negotiating major lease concessions from its hundreds of landlords, AMC was soon on track to blow through the money it had just raised as the pandemic worsened and theaters remained shut.
AMC began to face pressure from its top creditors, including Apollo Global Management Inc., which held a large share of the company's senior loans and was once a majority owner of the company.
"Apollo wasn't just crusading to put the company into bankruptcy, they came armed with a
Aside from the hassle of dealing with creditors, AMC also had to contend with the
But with the company burning
In August, AMC launched its first ATM offering, though most investors and analysts who followed the company doubted the effort would amount to much.
"There were plenty of people telling us you're not going to raise
However, there were some indications that individual investors were willing to bet on companies that were struggling amid the pandemic, wagering that there could be a huge upside if and when they recovered. This enthusiasm even resulted in a short-lived stock bubble in companies that had already filed for bankruptcy, like Hertz Global Holdings Inc. and
AMC's first two ATM rounds went better than expected, according to
AMC had reopened about half of its theaters by the fall, but found that due to operational costs, it actually hemorrhaged more money with them open than shut. It was burning through as much as
"He told me 'AMC must survive. Do what you need to do.'"
A major lifeline
By late January AMC was ready to announce that it had recently raised