AMC Entertainment Holdings Inc. CEO Adam Aron’s pay freeze is a move to assuage the movie-theater chain and meme stock phenomenon’s investors, according to Wedbush Vice President of Equity Research Alicia Reese.
The company’s stock hit a 52-week low of $3.81 on Wednesday.
On Tuesday AMC AMC,
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“He has had to make a number of moves over the last year and a half, give or take, to assuage his investor base,” Reese told MarketWatch. “One of the issues when the stock started to fall … is that the executives, Adam Aron included, started to cash out.”
“Investors are frustrated,” she added.
Aron had sold more than $40 million in AMC shares since November 2021 but said he was done after a $7.1 million stock sale in January.
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AMC, like its fellow meme stock GameStop Corp. GME,
The analyst says that AMC investors, who often refer to themselves as “apes” or “ape nation,” have typically fallen into one of three categories. The first group are retail investors who “wanted to stick it to the hedge funds,” according to Reese, the second are those that wanted to make a lot of money, and the third category are investors that essentially love AMC. The third group are, by and large, AMC’s remaining shareholders, she added. “Of course, many have been a little less enthusiastic of late,” Reese said.
AMC’s Preferred Equity units, or APEs APE,
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The APEs have fallen 75.8% since their debut.
On Tuesday Aron explained that he had also asked AMC’s top 15 to 20 executives to forgo an increase to their cash salaries for 2023, and that they had agreed.
Despite the top-level salary freezes, Aron confirmed that AMC’s employees will get a raise. “Yes, absolutely yes,” he tweeted, in response to a question posed on Twitter. “We are asking for financial sacrifice only from those at the very top.”
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In a note released earlier this month, Wedbush favored IMAX Corp. IMAX,