FORTUNE -- AMC Entertainment, the nation's second-largest movie theater chain, returned to the public market earlier this week, closing off what has become the best year for IPOs since the peak of the dotcom bubble in 2000.
Whether that's actually the case is up for grabs, but AMC is doing what competitors aren't at a time when declining ticket sales have weighed on theaters industrywide. The Leawood, Kan.-based chain is looking to generate more revenue per patron through the sale of dinner and higher-end food options -- something smaller independent theaters have tried. With interests in 343 theaters with 4,950 screens, it is the second-biggest theater operator in the U.S., next to Regal Entertainment.
In its debut on the New York Stock Exchange Wednesday, AMC (AMC) raised $332 million, selling 18.4 million shares at $18 a share. That share price came in at the low end of its expected price range of $18 to $20 a share. The stock closed 90 cents higher at $18.90 on its first day of trading -- a decent but not spectacular pop, considering the heavy marketing AMC did in the months leading to its IPO. (It offered some loyal movie goers a chance to buy shares at the same price big investors pay). On Friday, the stock closed higher, at $19.68 a share.
It's clear investors believe that AMC could be more profitable, but the IPO also signals that they're cautious, too. The company reported a profit of $84.8 million during the nine months ended Sept. 30, reversing a $43 million loss from a year ago. However, growth is somewhat slow. AMC opened three theaters with 25 screens but closed four with 29 screens during that same time period.
AMC Chief Executive Gerry Lopez has said the proceeds from the IPO will be used primarily to pay down the company's debt -- $2.19 billion as of Sept. 30. AMC also plans to invest in theater upgrades, adding more upscale elements to its venues with in-theater dinning options, similar to its recently opened location in Marina Del Ray, Calif., where patrons can order food and drinks, including beer and wine, while sitting in reclining leather seats.
The strategy could be viewed as AMC's attempt to lure more patrons to the theater and away from watching movies in the comfort of their homes. However, the strategy isn't so much a way to increase ticket sales as it is to get already hooked movie goers to spend more, says Adriana Lozado, senior analyst at Privco Media, a New York-based research firm that tracks privately held companies. AMC is also planning to install bigger and comfier seats, which also means fewer seats in each theater. "It's a pretty bold move," Lozado says.
Before Wednesday's IPO, AMC had made several attempts to reenter the public market after going private in 2004. It filed for a $750 million IPO in 2006 as investors looked to recoup some of their investments in the company. But AMC withdrew that offering after investors balked at the $17-a-share asking price. The company tried again in September 2007 with a scaled-back stock offering, but withdrew the plan that year as the financial crisis unraveled. And in 2012, the chain put aside plans for an IPO before Wanda, China's largest entertainment group, agreed to buy AMC for $2.6 billion.
Indeed, it has been a struggle at AMC. And while investors seem optimistic, it's far from clear if moviegoers will buy into its new approach.
Changes are coming to the New York Stock Exchange after its acquisition by ICE, a smaller, leaner upstart.Dec 5, 2013 8:26 AM ET
It ain't what it used to be, says floor trader Kenny Polcari: "technology everywhere" but "a computer doesn't get it."
By D.M. Levine
An earlier version of this post appeared with errors introduced in the editing process. It has been updated and corrected throughout.
FORTUNE -- Kenny Polcari is walking across the floor of the New York Stock Exchange, reminiscing about the good old days. A floor trader with O'Neil Securities, when MOREMay 29, 2013 10:15 AM ET
The NYSE's new owner has historically been aligned with a few large banks.
FORTUNE -- Observers have long been worried about the New York Stock Exchange's ability to police stock trading so that it's fair for all investors. The acquisition by the InterContinental Exchange (ICE), which in late-December agreed to buy the NYSE (NYX) for $8.2 billion, may make matters worse.
Historically, the NYSE has been what's called a self-regulating organization. The MOREStephen Gandel, senior editor - Jan 7, 2013 11:26 AM ET
Traders say there were unexplained price swings and "quote spamming."
FORTUNE -- When stocks reopened for trading on Wednesday, for the first time since Hurricane Sandy, the market was a rare bit of calm. Stocks were bought and sold. Trading was never halted. The market even went up a bit.
To the average investor, it was an average day, and, other than what lead up to it, an unexciting one at that.
But MOREStephen Gandel, senior editor - Nov 6, 2012 12:15 PM ET
An increase in stock trading rule changes is making it hard for firms to keep up.
FORTUNE -- Perhaps the only thing moving faster than high-frequency traders are the changes to the rules that govern how they trade.
On the day of the flub that cost Knight Capital Group (KCG) $440 million in 45 minutes and briefly caused turmoil in over 100 stocks, the New York Stock Exchange issued three changes to MOREStephen Gandel, senior editor - Aug 8, 2012 2:40 PM ET
Building error-free trading software is impossible, and that makes today's stock markets even more fragile.
FORTUNE -- One question keeps arising in the saga of Knight Capital and its $440 million software glitch: why did Knight, one of the premier U.S. market makers that handles more than 10% of total stock trading, introduce glitchy software into the market?
CEO Thomas Joyce explained in a television interview that the company's new software program MOREScott Cendrowski, writer - Aug 3, 2012 2:17 PM ET
The high frequency trading battle between exchanges and market makers is resulting in big losses not just for Wall Street, but, likely, for us too.
Update 11:00 pm
FORTUNE -- In life there are few coincidences, and this one probably isn't either: The day Knight Capital Group's computers nearly blew up the market and lost the firm $440 million in 45 minutes is the same day that the New York Stock Exchange MOREStephen Gandel, senior editor - Aug 2, 2012 4:32 PM ET
The NYSE says uneven regulation is sending more and more trades into Wall Street's so-called dark pool and hurting investors.
FORTUNE -- The owner of the New York Stock Exchange says it's being picked on. And that could be hurting investors as well.
A top official at the NYSE Euronext, which owns the U.S.'s largest stock exchange, says regulators are singling out the NYSE and other listed markets in enforcing stock trading MOREStephen Gandel, senior editor - Mar 8, 2012 11:54 AM ET
The planned merger between the NYSE and the Deutsche Boerse has stalled, but the exchanges might revive it if they go after their largest competitors: The banks.
By Cyrus Sanati, contributor
FORTUNE -- The $17 billion mega merger between the New York Stock Exchange and Germany's Deutsche Boerse may look dead, but there's still a pulse. Company officials have just under three weeks to convince top leaders in the European Union that MOREJan 13, 2012 10:01 AM ET
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