Shares of AMC Entertainment (NYSE:AMC) have plunged about 28% in the past seven days and 76% in the past year. A considerable debt load and a weakening cash position have put pressure on the stock’s performance. Meanwhile, AMC CEO Adam Aron has requested the board not to increase his pay for 2023 as a result of the sharp decline in the stock price. Following the news, AMC inched 8% lower on Tuesday.
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Aron tweeted, “Biggest inflation in 40 years, so in 2023 companies will grant large percentage salary raises. But I do not want “more” when our shareholders are hurting.”
Also, the CEO has asked the company’s top executives to forego any increase in their cash salaries for 2023. The other AMC employees, however, are qualified for compensation increases.
Recently, the theater chain announced plans to reduce its interest expenses and improve liquidity by selling AMC Preferred Equity (APE) units to Antara Capital. Additionally, AMC disclosed its intention to undergo a 1-for-10 reverse stock split. The company has yet to bag shareholders’ approval for these moves.
Is AMC a Buy or Sell Stock?
Analysts are currently bearish on AMC stock. It has a Moderate Sell consensus rating based on two Hold and two Sell recommendations. The average stock price target of $3.53 implies 12.4% downside potential from the current level.
Furthermore, our data shows that hedge funds have a negative stance on AMC stock. In the last quarter, hedge funds sold 995.6K shares of AMC. Overall, it has a Smart Score of one on 10 on TipRanks, indicating underperformance in comparison to the broader market.
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