AMC CEO Adam Aron says companies should listen to individual shareholders – but analyst says being accountable to millions of people is “like not responding to anyone.”
- AMC CEO Adam Aron said on Twitter that companies should listen to shareholders.
- But one market expert said responding to millions of people is like “not responding to anyone.”
- “It’s not like any of them are really going to have an influence on him as CEO,” the expert said.
- See more stories on the Insider business page.
AMC EntertainmentCEO Adam Aron said his strategy of reaching the millions of individual shareholders backing the memes stock was “obvious” – but a market strategist isn’t so sure.
Aron, who has come into the limelight for serving the horde of retail investors backing his company’s stocks, said on Twitter Monday: “The financial press grabbed the headlines about how AMC and I “We are innovative in reaching out to our individual investors. Weird that they praise something so obvious. CEOs and professional management teams need to listen to shareholders. You own our business, we listen to you.”
-Adam Aron (@CEOAdam) June 7, 2021
Aron, who adopted the status of the company as a meme action, said on a earnings conference call that its communications strategy will change in light of AMC’s new investor base. He has since taken to Twitter and YouTube to talk to individual shareholders and even launched a rewards program for them that includes free popcorn, among other advantages.
Richard Smith, an expert on investments and market cycles, said Aron’s message that he works for over 3 million individual shareholders who make up 80% of stock investors is a “powerful” message. , but he doesn’t believe it.
“Responding to 3 million people is like responding to no one,” he said.
Smith, director of the Foundation for the Study of Cycles, said institutional investors, such as banks or hedge funds, typically own large stakes in a company and therefore have leverage on how it is run. . But with AMC majority owned by individuals, Aron doesn’t actually have to respond to any of them, Smith said, because “it’s not like any of them would really have any weight on him. as CEO “.
“It’s kind of like a CEO’s dream come true,” he said.
AMC did not respond to Insider’s request to comment on the story.
AMC was previously majority-owned by Chinese private conglomerate Dalian Wanda Group. But after the conglomerate recently has sold almost all of its remaining stake in the business, retail investors applauded the opportunity to buy more into the stock. A Redditor on the Wall Street Bets investment feed said, “We now own the future of this business!”
The stock closed last week 83% higher, thanks to renewed interest from retailers on Twitter and Reddit. Monday, AMC shares are recovering again as retail traders continued to ramp up the action on social media.