To The Moon

Of all the things to consider before buying a stock, understanding who owns the company’s equity is rarely a top-of-mind factor. In the case of AMC, however, the story may be a little different.

Today, Wall Street Memes looks at AMC stock’s ownership and explains why it could have an impact on how the company operates – and how the stock behaves.

AMC largest holders

According to data provided byYahoo Finance, AMC has a float of 513 million shares. Of the total, about 74% is owned by the public, 25% by institutions and 0.3% by insiders – directors, company's officers, and those with access to company information before it becomes public.

Among institutions, Vanguard and Blackrock are the top holders, with 8% and 6% of the shares, respectively. Naturally, these firms turn their holdings into shares of ETF, which in turn can (and usually do) end up owned by more individual investors.

Figure 1: AMC stock ownership.ChartMill

In May, AMC's previous largest shareholder, China's Dalian Wanda Group Co,sold30.4 million of its shares purchased in 2012 for roughly $430 million – funny enough, only days before AMC stock spiked from $14 to over $60 apiece. Currently, Wanda owns only 10,000 shares, representing a small $420,000 in market value.

After the large Wanda sale, AMC's CEO Adam Aronrevealedthat no entity held an ownership stake above 10%.

Implications for the stock

A company whose ownership is widely distributed across the general public, as is the case of AMC, can benefit in a couple of ways. For instance, AMC can implement or change company policy without necessarily being aligned first with a handful of key shareholders.

AMC’s ownership layout allowed for something curious to happen recently. CEO Adam Aron put to a vote theissuanceof 25 million new shares, which was then vetoed by a majority of AMC shareholders due to fears over a share price decline. Were AMC primarily owned by only a few, the polling would have likely not even taken place.

In the end, the ownership structure allows AMC the flexibility to make its strategic decisions with certain independence – unless the management team chooses to consult with the broader base of individual investors more often.

In conclusion

AMC stock is owned, by and large, by retail investors – roughly speaking, the AMC ape community. Based on the latest shareholder count providedby AMC itself, the percentage of general public ownership is now greater than 80%, with each retail investor holding around 120 shares ($5,000) on average.

Wall Street Memes believes that this is a good setup for AMC’s retail investors, as the fate of the company depends much less on the agenda of large institutions and a few insiders.