An AMC theater is pictured in Times Square in the Manhattan neighborhood of New York, New York, June 2, 2021.

Carlo Allegri | Reuters

AMC Entertainment shares fell nearly 7% on Friday after two of the company’s executives sold a significant portion of their shares.

CEO Adam Aron sold an additional $ 9.65 million of AMC shares as part of his estate planning, a move he warned investors he would make in August. He sold 312,500 shares on Tuesday for an average of $ 30.86 a piece, according to a regulatory filing filed Thursday.

The sale comes a month after Aron sold 625,000 shares of the company for around $ 25 million. He continues to hold approximately 96,000 shares, excluding approximately 2.9 million that may be issued in the future and on the basis of performance targets.

Separately, AMC chief financial officer Sean Goodman sold all of its 18,316 shares for approximately $ 565,000, according to a separate filing with the Securities and Exchange Commission. This does not include approximately 296,000 shares issuable based on Goodman’s continued service with the company or approximately 293,000 shares attached to performance goals and targets.

Aron recently announced that the company’s board of directors has approved a new stock policy for senior executives of the company that would require them to own a certain number of AMC shares. Under the new policy, the CEO is required to own or award shares equal to at least eight years of salary. The CFO must have six years of salary in stock. The unvested shares of Goodman meet this requirement.

AMC representatives declined to comment.

“I think while Adam Aron has made clear his intention to liquidate part of his position in AMC stocks by the end of the year, many investors have been taken aback by the extent to which he has sold. stocks between early November and mid-December, “said Alicia Reese, analyst at Wedbush.

“Sure, Sean Goodman already has more shares since he sold in November, and all executives will continue to accumulate more shares as part of their compensation plans, but they’re walking a fine line in taking advantage of the high share price while retail shareholders are committed to owning it at all costs, ”she said.

Eric Handler, media and entertainment analyst at MKM Partners, noted that the stock is currently trading 30 times next year’s estimated Adjusted EBITDA and 22 times its 2023 forecast. AMC’s historic valuation peaked at about 9 times the metric, he said.

AMC shares exceeded an all-time high $ 72 in June, as the company garnered the backing of millions of individual investors. In recent months, however, stocks have more than halved. On Friday, the stock closed at $ 27.44, down 6.8%.

Before this wave of new investors, the company’s shares hovered between $ 5 and $ 10, but fell to $ 1.91 a share in January, when it looked like AMC might not avoid bankruptcy.

The “same stock” rally helped the movie theater chain, which had been hit hard by the pandemic and was heavily in debt from previous acquisitions. Increasing his inventory allowed Aron to get enough money to pay rent and even add more theaters. However, even with diverse content, like football matches and concerts, and the company’s ability to accept cryptocurrency for tickets and concessions, analysts don’t expect AMC stocks to hold on. these high levels.

“The current price does not appear to be sustainable on a fundamental basis,” Handler said, “[It’s a] very opportunistic way for management to get paid. “

AMC executives and board members previously unloaded more than $ 70 million in stock this year, according to a Bloomberg report. While many of these sales were planned in advance by management, it represents a massive change for these executives, who have only sold a fraction of that amount in previous years.

Aron, 67, has been very transparent with investors, repeatedly informing them that his sales of shares were part of estate planning to diversify his portfolio. Other AMC executives have been less vocal about the reasoning behind their sales.

These stock sales come at a time when insider sales have accelerated. A recent InsiderScore / Verity study found that insiders sold more than $ 69 billion in stock this year, a record. The changes came as stock wealth has grown and at a time when Congress is considering imposing significantly higher capital gains tax rates and making changes to inheritance tax policy.