AMC Entertainment Holdings, Inc. (AMC) Accused of Misleading Shareholders
According to allegations in a pending securities class action lawsuit for breaches of fiduciary duties, contribution and indemnification, and alleged violations of the Securities Exchange Act of 1934, in late 2016 and early 2017, AMC Entertainment Holdings, Inc (AMC) undertook a series of large acquisitions, including Carmike Cinemas Inc. (“Carmike”), Odeon and UCI Cinema Holdings Limited, and Nordic Cinema Group, transforming AMC into the largest theater company in the world. AMC then made public statements assuring the integration of the acquisitions and touting the Company’s prospects moving forward. However, on August 1, 2017, AMC released shockingly disappointing preliminary results for second quarter of 2017, citing Carmike’s poor performance, Carmike’s underinvestment in theaters, and the seasonality of its international business. On this news, AMC’s stock price plummeted 27% to $15.20 per share, representing a 57% decline from its recent class period high of $34.45. Consequently, on January 12, 2018, investors filed a class action lawsuit against AMC for alleged violation of federal securities laws. On September 23, 2019, the lawsuit survived the motion to dismiss, paving the way for further litigation.