Shares of AMC Entertainment (AMC 7.01%) are rising 8.7% higher at 10:13 a.m. ET on Friday following CEO Adam Aron thanking the movie theater operator's shareholders for their support as rival Cineworld (CNNW.F) filed for bankruptcy on Wednesday.
It's been expected for some time that the Regal theater owner would eventually file, as the industry is still racked by low attendance, but Aron assured investors AMC is in a "very, very different situation."
AMC has rallied on the demise of its peer with shares rising 14% since their Monday close. Although both theater operators have over $5 billion in debt, Aron maintains it was because of investors who rallied behind the stock over the past year that AMC doesn't find itself in a similar position.
Aron tweeted, "Fortunately, AMC is in a very, very different situation -- because retail investors embraced us and let us raise boatloads of cash. Thank you to retail! You really did save AMC."
AMC ended the second quarter with $965 million in cash and equivalents on its balance sheet.
AMC stock has rallied numerous times over the past year, though none of those rallies have held, and shares have usually ended lower than they began. AMC still needs to prove it has an effective strategy to turn its movie theater business around, which may be difficult.
Although he might be biased, former Disney (DIS) CEO Bob Iger recently told a conference he didn't think theater attendance would ever achieve pre-pandemic levels again.
"It doesn't mean moviegoing goes away," CNBC quoted Iger as saying. "I'm a big believer in movies. I love big movies ... but it doesn't come back to where it was."
Unless AMC can prove him wrong, the theater chain may one day find itself in the same position as Cineworld.