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Shares of AMC Entertainment extended its two-day decline to as much as 20% on Friday after SEC filings revealed insider selling by the movie theater chain's CEO and CFO this week.
CEO Adam Aaron sold $9.6 million worth of AMC shares on December 7, while the company's CFO sold the last of his remaining shares, worth about $600,000. Over the past three months, company insiders at AMC sold stock 24 times, while there was only one instance of open market buys, according to data from Nasdaq.
On top of the insider sales, CEO Adam Aaron rejected an idea popularized by retail investors in recent weeks of issuing an NFT dividend, serving a double whammy to investors that latched onto the stock earlier this year amid a surge in so-called meme-stocks.
"NFTs are a superb idea. But not a 1 per share security token NFT dividend, as repeatedly described on Twitter," Aaron tweeted to his 225,400 followers on Thursday.
The specific idea circulating among AMC's retail shareholder base in recent weeks involved AMC issuing a NFT dividend for every share of AMC, with the hopes of sparking another short-squeeze similar to the one that ocurred in early June.
"It is likely illegal, breaches our debt covenants and/or exposes AMC to huge litigation risk. We can't do it. Beware of concepts that sound easy and too good to be true," Aaron warned.
But Aaron has taken cues from his fervent shareholder base in recent months, with the movie theater chain accepting meme-inspired cryptocurrencies like dogecoin, as well as issuing 86,000 free Spider-Man NFTs to early ticket buyers of the upcoming Spider-Man: No Way Home movie.
Still, those initiatives have done little to shore up its recent stock price decline as the company faces a difficult task of reversing an ongoing secular decline in the movie theater industry as content streaming and the COVID-19 pandemic lowers box office ticket sales.
Shares of the $16 billion movie theater operator are down 63% from their record high of $72.62 in June, but are still up more than 1,200% year-to-date.