Are the retail investors who famously came to AMC’s rescue two years ago, saving the movie theater colossus from bankruptcy, about to get screwed? That’s the concern gripping many of them. In fact, if Hollywood’s writers weren’t on strike, those David versus Goliath scripts might need an update. This time around, it’s not Redditers taking on the hedge funds shorting the stock. Instead, they’re directing their ire at AMC’s own leadership and what they perceive to be double-crossing plaintiff attorneys. 

You’re probably already familiar with how AMC became a meme stock at the beginning of the Covid pandemic with its theatrical business in tatters and vulture capitalists swirling. AMC’s wily C.E.O., Adam Aron, seized the moment and raised nearly $2 billion by issuing new stock, staving off creditors as the company’s digital army of retail investors—self-described AMC “apes”—banded together to overcome short sellers and send the share price through the roof. But that was only the beginning of the story. 

Chinese conglomerate Wanda Group also used the opportunity to sell off its entire stake in AMC while many of the company’s executives took advantage of suddenly valuable vested stock options. Meanwhile, the company remained significantly in debt, with delayed rent bills coming due and money spent on questionable ventures, like gold and silver mining. And so, AMC began raising hundreds of millions of dollars more last autumn through the issuance of a special class of “preferred” stock (which, honestly, wasn’t exactly preferred since it began trading at a heavy discount).