AMC Entertainment CEO Adam Aron has sold 625,000 shares in the company, worth approximately $25 million, according to a Wednesday filing with federal regulators.
That’s just half the of shares he plans to sell over the coming days, weeks and months, according to the filing. The total market value of the shares sold could rise beyond $50 million.
Even though the sale — which Aron said was for estate-planning purposes — had been telegraphed in August, the disclosure of the sale still sent shares lower Wednesday. They fell 4 percent during normal-hours trading and another 3 percent in after-hours trading.
On Thursday, AMC’s stock rebounded, erasing some of the previous day’s losses. By afternoon trade, the stock was up around 3.6 percent to trade at $39.68 per share.
Aron’s stock sale is part of an estate-planning process, according to the filing with the Securities and Exchange Commission. Wednesday’s chunk marks half of what Aron eventually plans to sell ahead of his 67th birthday next year, Aron told investors last August. He reiterated the plan on the firm’s third-quarter earnings call Monday.
Under the plan Aron will sell 1.25 million shares over a period of the coming days, weeks and months. Wednesday’s filing said Aron already had dumped half of that stake by late Tuesday.
Aron said he will still hold more than 2 million shares even after the sales are complete.
The CEO told investors on the earnings call earlier this week: “On our last call, I also pointed out to you that in September of 2021, I would turn 67 years of age — a youthful, vibrant, vigorous full of life 67 I might add — but 67 nonetheless.”
He continued: “Prudent estate planning suggests I should diversify my assets a bit, especially with Congress having been discussing imposing potentially soaring capital gains tax rates and significant changes to what can be passed on to one’s heirs.”
The boss of the world’s largest movie theater chain added that that during his almost six years with AMC he had never sold any of his stock, except for the 500,000 shares he gifted to his adult children.
“If you do the math, you will see that with this much current and future ownership of AMC, I have an enormous personal stake in the future of our company — of your company — of AMC Entertainment,” he said. “I fervently believe in AMC and my interests are very much aligned with our broad shareholder base to care very much about the value of your ongoing investment, and my ongoing investment, in AMC Entertainment stock.”
Shares of AMC have soared more than 1,700 percent this year, lifted by this year’s meme stock craze.
The movie theater chain was devastated by the pandemic and nearly fought off bankruptcy in late 2020. But, a surge in its stock allowed the company to gain nearly $2 billion in liquidity as it waited for the box office to rebound.
During the third quarter, AMC narrowed its net loss to $224.2 million, or 44 cents a share, compared with a year-ago loss of $905.8 million, or $8.41 a share. Revenue rose to $763.2 million from $119.5 million last year, as moviegoers have slowly returned to the cinema.