AMC CEO says retail investors saved company as Regal parent Cineworld files for bankruptcy

AMC (AMC) CEO Adam Aron is not worried about competitor Cineworld's (CINE.L) bankruptcy announcement because, well, it has the "Apes" on its side.

The executive called out the positive impact of retail investors — who call themselves "Apes" — who powered the stock during the COVID-19 pandemic. Aron emphasized that AMC is not in the same position thanks to retail investors "embracing" the company during that time.

"Fortunately, AMC is in a very, very different situation — because retail investors embraced us and let us raise boatloads of cash," Aron tweeted.

Britain's Cineworld Group (CINE.L), the parent company of Regal Cinemas, filed for bankruptcy on Wednesday after struggling to climb back from pandemic lows. The news, widely anticipated, comes after The Wall Street Journal reported last month that the theater chain was preparing to file in the U.S.

AMC, in contrast, has raised roughly $2.2 billion over the past two years, fueled by last year's meme stock frenzy. AMC moved lower on Cineworld's bankruptcy news with shares down about 2% in early afternoon trading and trading just above its 52-week low.

Cineworld shares surged on the announcement, rising about 10% following the news.

"We have an incredible team across Cineworld laser focused on evolving our business to thrive during the comeback of the cinema industry," Cineworld CEO Mooky Greidinger said in a statement to Yahoo Finance.

"This latest process is part of our ongoing efforts to strengthen our financial position and is in pursuit of a de-leveraging that will create a more resilient capital structure and effective business. This will allow us to continue to execute our strategy to reimagine the most immersive cinema experiences for our guests through the latest and most cutting-edge screen formats and enhancements to our flagship theatres," the executive continued.

The Chapter 11 filing, obtained by Yahoo Finance, will allow the company to continue operations and restructure its business in order to significantly reduce debut and strengthen its balance sheet.

Cineworld, which operates more than 9,000 screens across 10 countries, is the second-largest theater chain after AMC (AMC), but has run up a debt load of more than $5 billion after losses accelerated during the pandemic.

Last month, the chain warned that a lack of big-budget movies will likely impact attendance through the fall, further affecting its ability to cut debt.

Film supply is set to significantly slow down this year, stalled by pandemic backlogs and post-production supply chain issues.

The domestic box office has suffered as a result. So far this year, the annual box office take is down about 30% compared to the same point in 2019, according to Comscore data.

Alexandra is a Senior Entertainment and Food Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at alexandra.canal@yahoofinance.com

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