AMC stock struggled during Monday’s trading session, falling over 9% in the last 24 hours. The company says it has struck a set of deals with creditors to obtain new financing, swap existing debt for a mix of new debt and equity securities, and settle litigation brought by a group of bondholders. With the company converting some of its sizeable debt load to equity, and potentially a lot more to come, the stock has tumbled.

While the agreement reduces the company’s existing debt, it does so by diluting current shareholders. The percentage of the company owned by current shareholders is reduced, affecting their holdings. Holders of the company’s exchangeable notes will receive 79.8 million shares of common stock in exchange for at least $143 million of 6% to 8% notes due in 2030. An additional $195 million worth of debt could be converted into common stock over time. “The transaction reduces leverage, extends maturities and improves liquidity, though it introduces near-term dilution and potential for additional share issuance tied to future conversions,” wrote Benchmark analyst Mike Hickey in a note. As a result, AMC investors have quickly pulled away from the stock, sending the stock falling today.

AMC has made a name of being a popular meme stock, with investors in the past driving the company’s stock up due to praise from meme investors like Roaring Kitty. However, that meme phase has appeared to die out in the last year, with AMC down over 50% in that period, including over 40% this year alone. While the company could see a rebound with a meme-like spark, the absence of such in 2025 and uncertain market environment suggests otherwise.

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In a post on X, AMC Chief Executive Adam Aron described the deal as “one of the more important developments in AMC’s multi-year effort to fight back from the ravages that COVID prompted in 2020.” 2020 proved a turning point not just for AMC, but for the theater industry as a whole. Not only did revenue plummet and has slowly fallen since, but the streaming sector has exploded. Only when big movie events like The Avengers franchise or “Sinners” is sales up for theaters like AMC and Regal Entertainment.

On the other hand, CEO Aron reiterated his recent comments about an improving box office. “The growing box office since April has been roaring loudly,” he wrote. “Thank you to ‘Minecraft,’ ‘Sinners,’ ‘Lilo & Stitch,’ ‘Thunderbolts*,’ ‘Final Destination Bloodlines,’ ‘Mission: Impossible — The Final Reckoning,’ ‘How to Train Your Dragon,’ ‘F1,’ ‘Jurassic World Rebirth,’ ‘Superman’ and so many more appealing movies!”