- AMC CEO Adam Aron said on Twitter that companies should listen to shareholders.
- But one market expert said answering to millions of individuals is like “answering to no one.”
- “It’s not like any of them are going to really have leverage over him as the CEO,” the expert said.
- See more stories on Insider’s business page.
AMC Entertainment‘s Chief Executive Officer Adam Aron said his strategy of reaching out to the millions of individual shareholders backing the meme stock is an “obvious” one – but one market strategist isn’t so sure.
Aron, who has come into the spotlight for catering to the horde of retail investors backing his company’s stock, said on Twitter Monday, “The financial press has banner headlines about how innovative AMC and I are in reaching out to our individual investors. Odd that they praise something so obvious. CEO’s and professional management teams should listen to shareholders. You own our company, we listen to you.”
-Adam Aron (@CEOAdam) June 7, 2021
Aron, who has embraced the company’s status as a meme stock, said on an earnings call that his communications strategy would change in light of AMC’s new investor base. Since then, he’s gone on Twitter and YouTube to talk to individual shareholders and has even started a rewards program for them that includes free popcorn, among other perks.
Richard Smith, an investing and market cycles expert, said Aron’s message that he works for the more than 3 million individual shareholders who make up 80% of investors in the stock is a “powerful” one, but he doesn’t believe it.
“Answering to 3 million people is like answering to no one,” he said.
Smith, head of the Foundation for the Study of Cycles, said usually institutional investors, like banks or hedge funds, have large stakes in a company, and therefore leverage over how it’s managed. But with AMC being majority-owned by individuals, Aron doesn’t actually have to answer to any of them, Smith said, because “it’s not like any of them are going to really have leverage over him as the CEO.”
“It’s kind of like a CEO’s dream come true,” he said.
AMC didn’t respond to Insider’s request for comment on the story.
AMC was formerly majority-owned by private Chinese conglomerate Dalian Wanda Group. But after the conglomerate recently sold almost all of its remaining stake in the company, retail investors cheered the opportunity to buy more into the stock. One Redditor on the investing thread Wall Street Bets said, “We now hold the future of this company!”
The stock closed last week 83% higher, thanks to renewed interest from retail traders on Twitter and Reddit. Monday, AMC shares rallied again as retail traders continued to hype up the stock on social media.