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AMC shares slump as CEO Adam Aron, CFO Sean Goodman sell stock

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AMC Theatre is seen in Times Square, New York City’s Manhattan borough, New York City on June 2, 2021.

Carlo Allegri | Reuters

The shares of AMC EntertainmentThe stock dropped more than 9% after the sale of large shares by two company executives.

As part of his estate planning process, CEO Adam Aron also sold AMC stock for $9.65million. a move he warned investors he would make back in August. A regulatory filing from Thursday shows that he sold 312k shares Tuesday, at an average cost of $30.86 each.

Aron’s sale is one month later. sold 625,000 shares of the company for around $25 million.He still holds approximately 96,000 shares. However, there are about 2.9million that could be issued in the future. This is based on his performance targets.

According to separate filings with the Securities and Exchange Commission, Sean Goodman, AMC Chief Financial officer, sold his 18,316 shares in exchange for $565,000 Based on Goodman’s service to the company and around 296,000 shares that are attached to targets or performance goals, this does not include approximately 296,000 shares.

Aron announced recently that the board of the company approved a stock policy that required senior executives to own a minimum amount AMC shares. According to the policy, the CEO will have to own or grant shares equivalent to at least 8 years salary. Six years of salary must be held in stock by the CFO. Goodman meets this requirement with his unvested stock.

AMC representatives declined to comment.

Eric Handler of MKM Partners, media and entertainment analyst said that Adam had sold off 90% to diversify his portfolio given his age. “The CEO has sold 100% his shares.”

Handler stated that current stock prices are 30 times the estimated adjusted EBITDA for next year and 22 times his 2023 projection. Handler stated that AMC has a historical value of around 9 times this metric.

AMC shares climbed to $72 in June as it received support from millions. However, AMC shares have fallen to $26 in the last six months.

The shares traded between $5 and $10 before the new wave of investors. However, they plummeted to as low as $1.91 in January, when AMC was beginning to doubt its ability to survive bankruptcy.

This rally helped to revive the chain of movie theaters, that was already heavily indebted after the Pandemic. Aron’s stock price rise allowed him to obtain enough cash to cover rents and to add theaters. Analysts aren’t expecting AMC shares, despite the variety of content such as football and concerts and their ability to accept bitcoin for tickets or concessions.

Handler declared, “The current price is not sustainable on an essential basis.”[It’s a]Management can be very open-minded to getting paid.

AMC board members and executives had been previously unloaded more than $70 million in shares thisAccording to Bloomberg, this is the highest year-over-year sales. Although many of these sales were planned by the management, this represents a significant shift for those executives who had only sold a small fraction of what they did in prior years.

Aron, who is 67 years old, was very open and transparent with investors. He repeatedly explained to them that the sale of stock shares were part his estate plan move to diversify portfolio. The reasoning behind the sales has been more muted by other AMC executives.

This stock sale is happening at a moment when insider selling has increased. InsiderScore/Verity recently found that insiders have been selling stock in record numbers. sold more than $69 billion worth of stock this year — a record high. Stock wealth has increased and these changes occurred at a time when it had been low. Congress is discussing imposing significantly higher capital gains tax ratesMaking adjustments to your estate tax policy

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