AMC Entertainment Holdings Inc. (NYSE:AMC) was one of the worst-hit from the COVID-19 pandemic due to the lockdown restrictions that necessitated theater closures.
Amid the movie theater chains sagging fortunes, its Chinese parent Dalian Wanda Group cut its stake in the company considerably.
What Happened: Privately-held conglomerate Wanda Group, which owned 23.08% of AMC's outstanding shares and 47.37% of combined voting power, reduced its stake and voting rights to 9.8% as of March 3, AMC said in its annual report filed with the SEC Friday.
The reduction was done through Wanda exercising its right to convert all outstanding Class B common stock to Class A common stock in early February, resulting in the Chinese company owning 44,042,724 shares of Class A common stock.
Wanda had acquired AMC in 2012 by paying $2.6 billion, including the latter's debt.
"Even after conversion, Wanda may have significant influence over our corporate management and affairs, due to their representation on the Board of Directors and their 9.8% stock ownership as of March 3, 2021, based on our records and information from Wanda," AMC said in the filing.
Why It's Important: Theatre closures have led to AMC reporting a mammoth loss of $4.6 billion in 2020, as revenues plummeted 88% year-over-year.
AMC stock, however, found support from social media frenzy that drove it from a little over $2 at the end of 2020 to more than $11.
The meme stock was ably supported by stock pumping by Reddit forum, WallStreetBets.
In premarket trading Monday, AMC shares were advancing over 8.92% to $12.16.
(photo: Gpwitteveen via Wiki Commons)