Reddit, home to cute cat pictures, investment advice, niche hobby discussions, celebrity interviews, edgy memes, wholesome memes and everything in between, has been facilitating discussions on the internet since 2005. The site has about 57 million daily active users who post and consume news, memes, questions and even stock tips that can roil markets.

The company filed for an initial public offering at the end of 2021. As it prepares to go public, it’s looking to turn a profit for the first time. The company is charging for access to its application programming interface, or API. The price hikes have led some beloved third-party Reddit apps such as Apollo to shut down, instigating an uproar among the website’s community of volunteer moderators, who often rely on third-party apps to run the site’s 100,000+ discussion communities, called subreddits.

Despite extensive protests in which thousands of moderators took their communities private, the API pricing changes took effect July 1 as planned. Under pressure from Reddit admins, nearly all communities have reopened. But tensions remain high, and some say that if Reddit doesn’t rebuild trust, its most passionate users will go elsewhere.

“Reddit is nothing without those communities. They need us far more than we need them,” said David DeWald, a moderator of the r/Arcade1up subreddit and a community manager for the telecommunications company Ciena.

When Reddit co-founders Alexis Ohanian and Steve Huffman were in their senior year at the University of Virginia, startup accelerator Y Combinator was just getting off the ground. The two had met founder Paul Graham at a talk, and he suggested that the recent graduates build what he called “the front page of the Internet.” Ohanian and Huffman jumped at the chance. Y Combinator invested just $12,000 in 2005, and Reddit officially became a part of its first batch of companies.

“For the first probably like month, month and a half, a good number of the folks posting were just me and Steve under usernames that we just invented from like objects in the room, just random stuff just so that it would look like there was some activity,” Ohanian said.

But real user activity picked up, and just 16 months after its founding, Reddit was acquired for $10 million by Condé Nast. By 2010, co-founders Ohanian and Huffman were no longer involved in day-to-day operations, but traffic was booming. In 2011, Reddit was spun out as an independent company, operating as a subsidiary of Condé Nast’s owner, Advance Publications.

“I think it was fashionable back then to want to just grow and Facebook had proven out so well that if you focus on growth and then have a critical mass of users, you could make money,” Ohanian said.

On the one hand, Reddit’s niche communities were ideal places for target advertising, but the company’s permissive attitude toward questionable content also posed a problem.

“Reddit is kind of a perfect environment for advertising because the communities can get so specific and so passionate about whatever it is that they’re discussing,” said Debra Aho Williamson, principal analyst at Insider Intelligence. “But Reddit has had challenges over the years with hate speech and other things that are maybe not brand-friendly.”

Ohanian rejoined Reddit as executive chairman in 2014 and Huffman rejoined as CEO the next year. This time around, Ohanian said, he wanted to reign in some of the site’s more toxic subcultures. In 2015, a new anti-harassment policy led to the banning of some hateful communities, but certainly not all.

Then, in the wake of George Floyd’s murder in 2020, Ohanian resigned from the company’s board, urging Reddit to replace him with a Black candidate, which the company honored.

“I hoped that Reddit would finally get a hate policy so that we could ban those thousands of hate communities that were up, which happened, you know, a few weeks after I resigned,” Ohanian said. Reddit ultimately banned about 2,000 subreddits, including r/The_Donald, r/ChapoTrapHouse and r/gendercritical.

With the world stuck inside during the Covid-19 pandemic, engagement shot up. In the beginning of 2021, Reddit made headlines when users in the subreddit r/wallstreetbets organized a short squeeze on GameStop, the struggling video game retailer. Subsequent so-called “meme stocks” such as AMC kept Reddit in the news for months. Advertising was booming when the company filed for an IPO at the end of the year.

Now, Reddit wants to turn a profit. With companies such as OpenAI and Google scraping the internet to train large language models, Reddit wants them to pay for its data. Huffman announced in April that Reddit would start charging for access to its API, the gateway through which companies can download all of Reddit’s user-generated content.

But it’s not just tech giants who use Reddit’s API. Many popular third-party mobile apps and moderator tools also rely on API access, which was previously free. These third-party apps are largely just alternatives to Reddit’s official mobile app, which didn’t even exist until 2016. But when developers learned about the new pricing structure at the end of May, many realized they couldn’t afford it. 

“Most companies, whenever they have significant API changes, you know, they give anywhere from like three to sometimes like 15 months for developers to acclimate to these big changes,” said Dac Croach, a moderator of the r/Gaming subreddit, now the third-largest community on the site. “And with Reddit kind of coming out of the gate and saying, you know, you have 30 days to figure this out […] I mean, that is an impossible task for many of those third-party developers.”

The developer of Apollo said it would cost him over $20 million per year to operate given the new pricing structure. Apollo shut down, along with other popular third-party apps such as rif is fun, Reddplanet and Sync, a blow to their loyal users who said they have sleeker user interfaces and more features than the official Reddit app.

The pricing changes caused a particular uproar in a subreddit for blind users, who relied upon many of the third-party apps’ accessibility features. Blind moderators claim it’s very difficult to moderate on mobile using Reddit’s app, something Reddit says it’s currently working to improve.

In total, over 8,000 subreddits participated in a sitewide blackout from June 12 to June 14 to protest the changes. Many communities stayed closed much longer, while others labeled themselves “Not safe for work,” automatically making them ineligible spaces for advertising. 

While most communities have returned to business as usual, there are some notable exceptions. For example, the r/pics and r/gifs subreddits are now limited to featuring pics and gifs of comedian John Oliver. The moderators of the popular Ask Me Anything subreddit said they will no longer organize interviews with celebrities and other high-profile figures, which has long been a major driver of engagement.

“They’re not burning things down. They’re saying, hey, you know, you didn’t listen to me then, can you listen to me now?” said Croach.

Reddit is rolling out several new moderator tools for its native app, but the company’s overall response has left many moderators frustrated. In an interview with NBC News, Huffman compared moderators with “landed gentry,” saying that the control they have over the communities they moderate is undemocratic.

Now, as Reddit marches toward an IPO, the tech world is watching to see how these tensions play out.

“Everyone in this situation is passionate for the success of Reddit. Reddit needs to realize that passion is what’s driving all of this anger,” said DeWald of the r/Arcade1up subreddit. “They need to work with us and work with other moderators and work with the app developers to find a solution that’s better for everyone, including Reddit, because Reddit needs us to be there.”

Watch the video to learn more about the rise of Reddit, and how the recent protests could shape the company’s future.

AMC Entertainment It dropped plans to charge customers variable prices for cinema seats.

The company announced its “Sightline” pricing strategy in February and tested it at select locations in three US markets. The program costs moviegoers more to get the best theater seats, or “preferred line of sight” seats.

The program also lowered prices for seats deemed less attractive to patrons, such as those in the front row of theaters.

The change comes as the movie theater industry struggles during its slow summer blockbuster season. And theaters are counting on this week’s releases of Barbie and Oppenheimer to bring much-needed foot traffic to theaters.

Shares of AMC Entertainment fell less than 1% on Thursday. The stock is up more than 5% this year, lagging behind the broader market.

Preferred Sightline seats included select locations in the middle of the auditorium that were preferred by some moviegoers, while Value Sightline seats were those usually located in the front row.

The chain said the program will end at participating locations in the coming weeks.

The decision comes after the pilot program showed moviegoers had little or no interest in sitting in the front row, despite lower prices. The company said it also found that most moviegoers continued to choose the seats they preferred, even at higher prices.

The company added that the focus is ensuring that AMC’s ticket prices remain competitive. Other theater chains like the Regal don’t charge higher prices for better seats.

The movie theater chain said it will now focus on testing front-row seats with more comfortable seats at select locations in the US later this year.

CNBC has reached out to AMC for additional comment.

LOS ANGELES – The movies are still big. It is the multiplexes that are becoming smaller.

Since 2019, the total number of monitors in the United States has decreased by about 3,000 to just under 40,000.

This consolidation was a direct result of the Covid pandemic, which shut down theaters for some time and led to a surge in streaming subscriptions. A number of regional chains have closed for good, while others have been left to reassess their financial situation. For many, that meant closing sites or selling leases.

“Think about retail there in general, it’s repositioning itself, you don’t have many of the same branded stores in the market,” said Rolando Rodriguez, president of the National Association of Theater Owners. “Consumers are more selective, and I think for the necessary economies of scale, you’re not going to see those 30 plexes anymore.”

Most newly built locations will be between 12 and 16 screens, Rodriguez said, and those with larger pre-existing footprints will look at repurposing some of the spaces for additional activities for moviegoers, such as arcades, bowling alleys, or bars.

Theaters have been forced to innovate, even as Hollywood production has returned to normal and studios are offering more films for release than they were able to during the early stages of the pandemic.

With space contracting, cinema operators are investing in the essentials, improving sounds, picture quality and seating as well as in enhancing food and beverage offerings and alternative events and programming. The goal is to improve the basic experience for moviegoers regardless of the type of ticket they purchase.

“We do better when people get used to seeing,” said Larry Etter, senior vice president at the family-owned regional chain Malco Theaters. “And I think that’s what’s going to happen. I think we’re going to recreate the usual effect that on Friday nights or Saturday nights or whatever, we’re going to the movies.”

Already, the industry is seeing improvements in ticket sales. As of Monday, the 2023 box office has brought in $958.5 million in sales, up nearly 50% over last year and just 25% over 2019, according to data from Comscore.

That’s a marked improvement over its meager $98.7 million box office take during the same period in 2021.

Foot traffic has also improved, but it still lags behind pre-pandemic levels. In the two decades prior to the pandemic, the industry sold an average of 1.1 billion tickets annually, according to data from EntTelligence. Even with Covid restrictions lifted in 2022, more than half that number of tickets for the year were sold. Ticket sales are expected to rise in 2023 as studios release more films.

While cinema operators are happy to increase studio production, they no longer take audiences for granted.

To this end, operators have begun to upgrade projectors. Over the past few years, movie theater operators have removed traditional digital projectors and installed laser units, citing cost savings over time and better picture quality for moviegoers.

“It’s a little pricey, but it will make for a better product on screen,” said Malco’s Etter. “The more light you have, the clearer everything will be, and the easier it will be to see. And it will be more economical. It’s sustainable because you’ll be using about 60% of the facilities you used before.”

Etter explained that traditional digital lamps need to be replaced after about 2,000 hours and produce so much heat that theaters have to pay more to adapt projector rooms. And the laser components last for 20,000 hours so they can go for years without being replaced.

Several theater operators told CNBC that they plan similar upgrades to their sound systems, saying they’ve partnered with companies like Dolby to bring high-quality speakers to their auditoriums.

“We’ve invested in Dolby Atmos, we’ve invested in new screens, we’ve invested in laser projection,” said Rich Dugridge, president and CEO of Warehouse Cinemas. “For me, that’s the key. I feel like you have to create the best picture and sound experience you can create to motivate people to spend money to go out to the movies.”

Across the industry, theater chains large and small are also replacing outdated stadium seating with reclining chairs in an effort to improve the overall cinema experience.

“[We are] “Really looking at our theaters and making sure they’re all amazing,” said Shelli Taylor, CEO of Alamo Drafthouse. So if they don’t have chairs, we go and upgrade. We’re doing facelifts where needed and really refreshing and making sure we continue to deliver that premium experience that people have grown to love and expect from the Alamo.”

These improvements are part of a broader trend that began before the pandemic. Consumers are beginning to choose more premium theatrical experiences for blockbuster features, choosing to pay more money to watch movies on larger screens or in specialty theaters.

In 2022, 15% of all domestic tickets sold were for premium screening, with an average ticket cost of $15.92, according to EntTelligence data. A standard ticket costs an average of $11.29.

So far in 2023, the average premium ticket is higher — $17.33 each — because so many moviegoers have seen it. Disney “Avatar: The Way of Water” in premium and 3D formats.

Blockbusters have always been a driving force for movie theater ticket sales. Prior to the pandemic, theater owners relied primarily on studio advertising — trailers, TV commercials and posters — to promote content and drive moviegoers into movie theaters. Now, they’re putting more into the mix.

Loyalty programmes, direct marketing and special events are some of the recent methods operators have used to attract audiences. AMC launched its first-ever ad campaign in 2021 featuring Nicole Kidman with the slogan, “We Make Movies Better.” The company has invested about $25 million in the campaign.

Smaller, budget-conscious chains need to be a little more creative.

“I’ve had a lot of conversations with distributors who just talk about better, more efficient ways to market their films,” said Daughtridge of the Warehouse. “This is often data marketing, paid social networks, better trailer placements, and [putting] Tickets on sale at the right time.”

“I think there’s a lot of low-hanging fruit,” he said of email lists, loyalty programs, and social media for personal marketing.

The Warehouse, which is soon to open its third location, is running promotions that range from offering margaritas with movie tickets to nightly “father-daughter” specials. In the middle of the pandemic, Warehouse Cinemas capitalized on Solstice Studio’s “Unhinged” release by hosting a car crash event during the film’s fifth week in theaters.

Most recently, the chain carried “Pajamas and Popcorn,” a promotion that gives customers in pajamas to the movies free popcorn. During this promotion, the company showed the Indiana Jones movie and the classic animated dinosaur film “The Land Before Time”. Tickets were $5 each.

Dugridge said the “Land Before Time” shows sold 1,400 tickets.

“It was one of those events that just popped up,” he said. “We didn’t expect you to do this much work.”

For big chains like AMCand Regal CinemarkAlternative programming comes in the form of live events, with movie theaters setting up streams for concerts, sports, and even Dungeons & Dragons campaigns.

Midsize chains like Alamo Drafthouse delve into eccentricity. When the Oscars favorite “Everything Everywhere at Once” hit theaters, the theater chain distributed hot dogs to ticket buyers who went to the “feast” event to celebrate the famous hot dog finger scene in the movie.

The company also worked with the Lincoln Zoo prior to opening its new location in Chicago’s Wrigleyville neighborhood to do an outdoor screening of “The Lion King” in the zoo’s lions’ den.

Alamo isn’t the only chain that’s innovating with food and beverages. Concessions have long been a staple of cinema, but in recent years theater owners have expanded on traditional popcorn and soda treats.

Cinepolis, which operates more than two dozen movie theaters in eight states, is a chain of fine dining theaters that offers a wide variety of food and drinks, ranging from chicken wings to lobster tacos. Cinepolis hosts a “Movie and Meal,” a specialty dinner served for a select new movie release.

“For us, food is crucial to the local experience,” said Cinepolis CEO Luis Oloki, noting that more people have large HDTVs at home, along with the ability to order from top restaurants.

This trend is not likely to slow, and industry insiders are optimistic about the future of the movie theater business.

“I think we have, unfortunately, had some pretty bad public relations aspects during the course of Covid,” said Rodriguez of the National Theater Owners Association. “And now we have to rebuild that muscle with consumers and remind them, ‘Hey, you know, this is behind us.'” Theaters are good. “

Cinemas have struggled to fill seats during the Covid pandemic, but some are facing another problem – what to do with their menus.

In many movie theaters, popcorn and soda appear alongside flatbreads, grilled cheese, lobster, and elaborate cocktails. But with debt burdens and a shortage of box office winners, theater chains of all sizes have had to shake up menus and launch creative food initiatives to boost revenue.

said Rolando Rodriguez, president of the National Association of Theater Owners and senior advisor to the National Theater Owners Association Marcus Theatres. “They’re really looking at the experiences they’re having in terms of movie-related meals. Expanding … into food and beverage is absolutely a must.”

Since 2019, before the pandemic, the number of North American screens has fallen by more than 3,000, according to Comscore. Market research firm Mintel said only 54% of people went to the theater between April and October 2022.

People are more inclined to wait to see a movie, said Mike Gallinari, senior travel and entertainment analyst at Mintel, than streaming services in theaters. This has forced some theaters to up their food game.

“Things like compromises and how that fits into the broader cinema experience are things that cinemas need to focus on and focus on,” Gallinari said. “Not only is it part of the experience that they can control, but it’s also more revenue that they can control since the movie theater box office. [performances] Variable based on the movie.

Theaters have struggled to keep their doors open during the pandemic. cinemaworld, which operates Regal Cinemas, filed for Chapter 11 bankruptcy protection in September, reporting $8.9 billion in net debt. Regal Cinemas will decline leases for 39 theaters beginning February 3. 15.

AMC Entertainment, the world’s largest movie theater chain, exited the third quarter with more than $5.3 billion in debt. AMC stock is down about 50% over the past 12 months. The company announced on Monday that it will change ticket prices depending on seat location.

Eric Wold, an analyst at P. Reilly Securities, said AMC, which operates dozens of AMC Dine-In Theatres, is unlikely to make free cash flow positive until 2024.

He added that the lack of content is the theaters’ biggest problem. Compared to 2019, Wold said, there was a 50% drop in films shown in theaters last year. Box office sales fell by more than 30%. He predicted that the industry would not return to pre-pandemic movie release numbers until 2025 due to delays and production backlogs.

Studios have certainly been more specific about which films get shown in theaters, and have favored blockbuster-style releases. “Avatar: The Way of Water,” released in December, and “Spider-Man: No Way Home,” released in late 2021, are among the 10 highest-grossing films of all time.

“A restaurant can open if it can get food and cooks. A theme park can open if there is electricity and people to play games. But if there are no movies, a movie theater cannot open and show,” Wold said.

While competing with declining attendances, Marcos Theaters reduced menus at Zaffiro, Reel Sizzle and Take Five Lounge concepts, as well as their Movie Tavern locations. Now, listings are mostly back to where they were before the pandemic as consumer spending grows.

“There’s a kitchen in everyone’s house, but people still go out to eat,” said Marcus CEO Greg Marcus.

“At the end of the day, humans want to be among themselves,” he said. “They want to go out. They don’t want to be home and they don’t want to sit on their couch.”

According to Wold, revenue from ticket sales is about a third greater than from franchise sales. But theaters make much more profit from franchises than from ticket sales.

About half of the money from ticket sales goes to studios, Wold said, while all franchise margins, which are typically more than 80%, are kept by theaters. Marcus Theaters draws 44% of its total revenue from franchises, compared to 39% in Marcus Theaters Cinemark theatres and 36% at AMC.

“No matter how great a flatbread is or how a theater can make a great cocktail, if a movie is bad, no one will come to the theater,” Wold said. “If you can make better food while someone’s already there and give them one more reason to want to go to the theater to see a movie…that’s definitely an attraction and can be an additional source of income.”

According to data from the research firm EntTelligence, the average price of popcorn in local movie theaters is $8.14, while the average price of a drink is $6.20. Those items typically have margins in the mid-90%, Wold said.

For more upscale items, the margins are much smaller, which means theaters can’t throw away the classics, but instead seek additional revenue from sandwiches or entrees.

“Throughout the pandemic, I’ve seen the average benefit per beneficiary go up exponentially,” Wold said. “This is a combination of getting more from each patron by increasing the basket size of what they order at the counter, but also getting more people to the counter who would otherwise have skipped it.”

Ahead of fourth-quarter earnings, Wold said theaters haven’t seen pressure on consumer spending concessions despite the rate hikes. The concessions, he said, were “very much a depression-proof tranche.”

However, theaters with larger menus are facing similar problems as those in restaurants, according to Mintel’s Gallinari, with some raising prices in response to the increase in the price of eggs and meat. Some are embracing healthy foods and bakeries, as well as partnering with local businesses.

“With cinemas and franchises already notorious for being overpriced, succumbing to the will of the market in this way can really work against the good of cinema,” Gallinari said.

Theaters have used the pandemic to make franchise sales more streamlined, Wold said, amid a labor shortage. Pre-pandemic, some theaters adopted a dining model where servers bring food from a central kitchen into the auditoriums, though many have shifted toward pick-up apps and reserved seating.

Marcus Theaters recently launched an online ordering application that more efficiently handles high volumes of orders. He said the app was more effective in increasing consumer sales and reducing the number of lines.

If it takes you a minute or two, take a minute and a half off [ordering] Process and multiply that by 15 million transactions, that’s a meaningful number if you can figure out how to structure yourself from a business perspective to go from taking order to just fulfilling orders,” Marcus said.

With some menus exceeding 50 items, Wold said, theaters are becoming more methodical about staffing and prepping food for the slower, heavier nights.

Some theaters, such as the Dallas-based Studio Movie Grill, predict attendance weeks in advance.

“We have enough history with enough analysis to say we know, whether it’s a horror movie or a romantic comedy, how they’re going to perform based on national projections and based on our own locations,” CEO Ted Croft said.

Studio Movie Grill, which takes orders at customers’ seats, recently shortened menus to focus on burgers, pizza and alcoholic beverages, which the team can quickly implement to seat more than 1,000 at times. About 25% of the total field team, Croft said, are kitchen staff.

After returning operating hours to pre-pandemic levels — and introducing themed drinks to films like “Black Panther: Wakanda Forever” — Croft said individual franchise averages continue to increase.

“The fact that we’re outperforming pre-pandemic KPIs gives us more confidence that if we get more movies, we’ll continue to grow,” Croft said.

Rich Doughridge, president and CEO of Maryland-based Warehouse Cinemas, has noticed a similar trend. About two-thirds of the staff at theater locations, he said, are in the kitchen or behind the concessions, whipping up mouth-watering grilled cheeses, hot dogs with homemade beer cheese, and classics like nachos and seasonal popcorn mix.

Daughtridge said the menu stays away from more perishable, low-margin items like steak or seafood.

A selection of craft cocktails, 32 craft beers, and ciders are available on the self-serve beer wall. This month, the theater will be presenting a themed cocktail for the movie “Winnie the Pooh: Blood and Honey.”

said Doughridge, who is also president of the Independent Film Alliance.

Cinépolis, a Mexican theater chain with 25 US locations, updates its menu twice annually and serves lobster tacos and mushroom-truffle pizza, among other funky theatrical meals.

For an advance screening of the bloody satirical film “The Menu”, Cinépolis has launched its “Movie and a Meal” initiative to sponsor seasonal screenings of the film. The company will do another iteration of “Cocaine Bear,” which includes two drinks, two appetizers, a main course, and a dessert.

“As our founder used to say back in Mexico, we’re building theaters to sell food,” said CEO Luis Oloki.

– CNBC Sarah Whitten Contribute to the preparation of reports.

Disclosure: “Cocaine Bear” is distributed by Universal Pictures, which is part of CNBC’s parent company, NBCUniversal.

AMC EntertainmentThe company’s stock fell rapidly on Thursday after the company announced a new $110 million capital increase and a proposed reverse stock split that would require shareholder approval.

Stocks paused briefly after the opening bell as AMC hit a 52-week low. The stock fell 15% in mid-morning trading.

The company said it plans to raise the new shares by selling them monkey The units—a form of preferred stock that references the “Apes” moniker approved by meme stock investors—to Antara Capital LP at a weighted average price of 66 cents per share. On Wednesday, the closing price of APE was 68.5 cents. The company said this reduces its debt burden by $100 million.

“It is clear that having APEs was serving exactly the purposes for which they were intended. They allowed AMC to raise a lot of welcome cash, reduce debt, and in doing so reduce our balance sheet and allow us to explore what is possible.” [mergers and acquisition] CEO Adam Aron said in a press release Thursday.

In addition, AMC is proposing a reverse stock split of AMC common stock at a ratio of 1 to 10. The Company requests a special meeting of shareholders to approve the reverse stock split, converting the APE units into AMC common stock.

The world’s largest movie theater chain is working to relieve a heavy debt burden, which grew during the early days of the Covid pandemic when theaters were closed, and has also dealt with inventory relief and a short film release schedule in blockbusters.

In November, the company reported another quarterly loss despite reporting higher revenues compared to the previous year due to higher operating costs. Despite having a significant amount of cash on its balance sheet, AMC spends more than it makes each quarter on operations such as franchise and movie exhibition costs, in addition to rent.

During the third quarter, AMC said it spent $179 million in cash.

However, the company said it is focusing on theater investments, such as upgrading movie screens and increasing the number of special effects screens such as Imax and Dolby Cinema, across its footprint.

The capital raise and proposed reverse stock split come a day after AMC announced it was no longer in talks to buy theaters from Regal parent Cineworld, which filed for bankruptcy earlier this year. In a securities filing, AMC said discussions with Cineworld’s lenders regarding assets in the United States and Europe have concluded.

AMC itself was on the verge of bankruptcy in 2021, but was able to avoid it after millions of retail investors converted its shares into M shares. The company has since put in place several plans to raise more capital to reduce its debt and invest in its acquisitions and theaters.

Read the full statement from AMC here.

According to the National Association of Theater Owners, the $3 movie ticket promotion aimed at boosting sales through movie theaters during a normally quiet weekend for business has attracted 8.1 million customers.

With those numbers, the group said, Saturday was the best day of the year to go to movie theaters.

Movie theaters drew $24.3 million in ticket sales from the National Film Day promotion, according to Comscore. The media analytics firm said it was up 9% from the previous week.

More than 3,000 movie theaters and 30,000 screens in the United States participated in the initiative, including major chains such as AMC Entertainment and Regal Cinemas as well as independent theaters. Feature films included Paramount’s “Top Gun: Maverick”, Warner Brothers’ “DC League of Super Pets”, and Sony’s “Bullet Train”.

Some theater chains offered discounts on franchises, too.

Ticket sales have plummeted in recent weeks, in part due to the lack of summer releases.

The nonprofit Film Foundation, which is part of the National Association of Theater Owners, hopes the discount ticket initiative will motivate customers to return to theaters, especially ahead of some big releases planned for the fall, such as Warner Bros. “Black Adam” movie for Discovery and “Black Panther: Wakanda Forever” movie by Disney.

Jim Kramer of CNBC warned investors Tuesday to avoid buying losing stocks in a bet against short sellers.

The market headed in favor of the short sellers on Tuesday after the major indexes fell. The market swung earlier in the day as it digested disappointing financial reports from companies and braced for key inflation numbers later this week.

“In a market that presents you with ample opportunities to lose money, I can’t support buying these losing stocks hoping to engineer a short squeeze. Sooner or later you end up with a day like today where this ‘crazy money’ tactic explodes in your face,” he said.

Below is a list of Kramer’s referenced stocks:

1. bed bath behind
2. cocky
3. AMC
4. Beyond the meat
5. Weaver
6. Jim Stop

It looks like more investors are trying their luck in short selling. The GS Most Short Index, which measures stocks that investors are short selling or betting on, is up more than 18% over the past five days. It’s currently at its highest level since last January, when the meme stock craze was at its peak.

Cramer warned investors that the measure makes losing stocks look deceptively attractive as long-term play.

“When good things happen to bad stocks, I get nervous,” he said. “We’ve seen a lot of low-quality stocks go up just because a lot of hedge funds shorted them at the same time, and it ended up being pressured on those short trades.”

Carvana CEO Ernie Garcia III regularly tells Wall Street that the “march continues” on the company’s mission to become the largest and most profitable used car retailer in the world.

And its stock price has gone this year, too, just in the wrong direction for investors. Within six months, Carvana has gone from a favorite Wall Street used-car retailer poised to cash in on a strong market to trading like volatile meme shares amid cost-cutting measures and layoffs.

The decline from grace for the Arizona-based used car retailer, including a nearly 90% drop in its stock price since November, has resulted from a combination of changing market conditions as well as self-inflicted wounds. Many traditional traders continue to report standard or near-record results, further highlighting Karvana’s problems.

Carvana has grown exponentially during the coronavirus pandemic, as shoppers have switched to online purchases rather than visiting a dealership, with the promise of hassle-free buying and selling of used vehicles at the customer’s home. But analysts are concerned about the company’s liquidity, increasing debt and growth, which this year is expected to be the slowest since it went public in 2017.

By accepting the company, Morgan Stanley’s Adam Jonas said in a note to investors: “By accepting the company, it has accelerated growth precisely at the wrong time to a consumer slowdown, causing a major mismatch between capacity and demand, resulting in a liquidity crunch.” The company cut its target price to $105 per share from $360.

The economic slowdown is due to higher auto prices, higher interest rates, and recession fears, among other factors. Carvana bought a record number of cars last year amid rising prices and surging inflation, in preparation for unprecedented demand that has since slowed.

Analysts say Carvana is far from abroad, but it may have peaked. There are concerns about moving forward in the used car market as well as its near-term risks that outweigh the potential rewards.

“Deteriorating capital market conditions and deteriorating trends in the used car industry have eroded our conviction on the way for Carvana to secure the capital needed to achieve adequate scale and self-financing status,” Stifel’s Scott Devitt said last week in an investor note. .

Carvana stock is rated as a “hold” with a target price of $89.30 per share, according to analyst estimates compiled by FactSet.

Carvana stock hit more than $300 a share before the company announced its third-quarter results on November 3. 4, when Wall Street earnings forecasts were missed and internal operating problems were revealed.

Garcia, who is also chairman of the board, told investors that the company could not meet customer demand, causing its entire fleet of vehicles not to be shown on its website for customers to buy. That, he said, was the result of the company buying cars at a higher rate than it could handle.

“We weren’t ready for that,” said Garcia, who co-founded the company in 2012 and grew it to nearly $13 billion.

To help with future productivity of vehicle purchases and renewal dates, Carvana on February 3rd. 24 has announced a definitive agreement to purchase the US operations of Adesa – the country’s second largest wholesale auto auction provider – from KAR Global for $2.2 billion.

Garcia said, at the time, that the deal “reinforces” Carvana’s plan to become “the largest and most profitable auto retailer.” He ended his prepared statements to investors about the fourth quarter profits on the same day with “the march continues.”

The deal was praised by investors, who boosted the stock by 34% over the next two days to more than $152 a share. This came on the heels of a steady decline due to recession fears and other macroeconomic trends affecting the used car market.

The gains from the deal were short-lived due to the macroeconomic environment and the company significantly missed Wall Street expectations for the first quarter, leading to a sell-off of the company’s shares and a raft of writedowns by analysts.

The company has been criticized for spending too much on marketing, which included a lackluster 30-second Super Bowl ad, and for not preparing for a possible slowdown or dip in sales. Carvana argues it was more prepared for the first quarter, having been unprepared for demand last year.

“We’ve built for more than our backs,” Garcia said during an earnings call on April 20.

The results led to a decline in the shares during the following week. Garcia described the problems as “ephemeral” and something the company would learn from. He admitted that Carvana may have been prioritizing growth over earnings, as the company backtracked on its plans to achieve positive EBIT by “a few quarters.”

The stock took a hit again in late April, when the online used-car dealer struggled to sell bonds and was forced to turn to Apollo Global Management for $1.6 billion to bail out an agreement to finance the Adesa deal.

Analysts view the Adesa buyout financing deal as “unfavorable” at a rate of 10.25%. His current bond yields were already over 9%. Bloomberg News reported that Apollo salvaged the deal after investors demanded a yield of about 11% on a proposed $2.275 billion junk bond and about 14% on a $1 billion preferred lot.

Wells Fargo analyst Zachary Vaddam said unfavorable terms would “inevitably delay the path” to the company’s positive free cash flow through 2024. In a note to investors on May 3, he downgraded the stock and lowered his target price from $150 to $65 a share.

Joseph Spaak of RBC Capital Markets expressed similar concerns about the deal, saying the integration “could be messy” over the next two years or more. It also downgraded the stock and lowered its target price.

“While the strategic rationale for Adesa makes sense, in our view, retrofitting and deploying 56 facilities over the next two years is likely to experience a prolonged period of operational inefficiency with up to 18-24 months of ongoing final risk coming,” he said in a note. Investor early last month.

Carvana shares hit a two-year low last week before rising as much as 51% on the same day alongside “meme stocks” like GameStop and AMC.

Meme stocks refer to a few select stocks that are suddenly gaining popularity on the internet and are driving sky-high prices and unusually high trading volume.

For example, Carvana’s trading volume on Thursday topped 41.7 million, compared to its 30-day average volume of nearly 9 million. Trading in Carvana’s shares was halted on Thursday at least four times.

Roughly 29% of Carvana’s shares available for trading are short sold, according to FactSet, among the highest in the US markets.

Carvana is trying to get back into the good graces of Wall Street. In a presentation to investors released late Friday, the company defended the Adesa deal and updated its growth and cost-cutting plans, including cutting vehicle acquisition costs.

The company said it is refocusing its three main priorities: increasing retail units and revenue, increasing gross profit per unit, and demonstrating operating leverage.

“We’ve made significant progress on the first two goals,” the company said. However, it said it needed to do more, specifically in terms of profitability, free cash flow, selling, and general and administrative costs.

The company, in the presentation, reiterated reports last week that it has laid off 2,500 employees, or about 12% of its total workforce, and that the Carvana executive team will forgo salaries for the remainder of the year to contribute to end-of-service compensation for out-of-service employees.

Carvana’s latest woes come as the country’s largest general dealer groups continue to report record or near-record profits amid falling inventories and rising prices.

AutoNation, the nation’s largest auto retailer, last month reported record first-quarter earnings per share of $5.78. The company has moved aggressively to used cars amid a drop in the availability of new cars during the coronavirus pandemic. Revenue from the used auto business increased 47% during the quarter, pushing its total revenue to nearly $6.8 billion.

Lithia Motors, which is in the midst of a robust growth plan to become the nation’s largest auto retailer, said its profit more than doubled during the previous year’s first quarter to $342.2 million. Average gross profit per unit for used cars — a statistic that investors watch closely — rose 32%, to $3,037. That compares to the Carvana at $2,833.

“Carvana appears to have gotten a lot of that tech stock aura that Tesla has also benefited from for a long time,” said David Weston, an analyst at Morningstar, which covers major publicly traded dealer groups but not Carvana. “I think maybe that was a tad generous by the market.”

– CNBC channel Michael Bloom And Hana Miu Contribute to this report.

Two of Mimi’s shares rose on Thursday, adding an unexpected wrinkle to a market that has been falling in choppy trading for more than a month.

GameStop jumped more than 30% and was halted by volatility several times, before ending the session with a 10.1% gain. Theater chain AMC Entertainment’s stock is up more than 8%, down from a more than 20% increase at one point.

GameStop and AMC turned heads early last year when a group of retail investors coordinated deals in online chat rooms to create massive short squeezes in these stocks widely hated by hedge funds and other players. The meteorite rallies caused significant damage to many of the hedge funds and other short sellers involved in these speculative names.

Since then, stocks have retreated from their peak prices, and short sellers are starting to build their positions again. According to FactSet, AMC has a short interest of 19.5%, while GameStop has a short interest of 21.4%. Short interest is a measure of what portion of a company’s available stock, or float, is short sold.

These big bets against the company can sometimes lead to dramatic one-day moves in the stock, as hedge funds move to close their short positions when the stock goes up, creating more buying pressure. This process is known as short pressing.

Even with Thursday’s big moves, shares remained well below their highs from the first half of 2021. GameStop, which rose to $483 a share on a daily basis last January, closed at $89.57 a share Thursday.

AMC, which hit an intraday high of $72.62 last June, closed at $11.20 a share Thursday.

Since the companies’ market capitalization has fallen so much, it may be easier for a few storefronts, or even one large fund, to force a new short squeeze.

However, Ihor Dusaniwsky of financial analytics firm S3 Partners said Thursday’s move is likely to cause short squeeze due to the safety of short positions.

“A wild ride for these stocks, but even though some short sellers may be pushed out of their positions for the latest profits in the market, today’s losses on the short side are a drop in the group relative to earnings. They’ve made these names over the past week and month, Dosanyowski said.

In 2021, both AMC and GameStop took advantage of temporarily higher stock prices to sell additional shares and raise capital. Adam Aaron, CEO of AMC, went to great lengths to embrace the retail investors who participated in the rally, answering small traders questions about earnings calls and offering shareholder privileges in physical cinemas.

AMC partially used the money it raised to buy other theaters across the country. However, the company also bought a stake in a small gold mining company earlier this year that has a shaky financial history.

CNBC’s Yun Lee contributed to this report.

Not even the tag team of Spider-Man and Batman were able to make AMC Entertainment profitable during the first quarter. However, movie theater shares rose more than 4% after hours on Monday after posting a smaller-than-expected loss during the period.

AMC has made great strides toward recovery since the pandemic closed all of its locations globally in 2020, but having a limited slate of new movies during the first three months of the year means fewer movie tickets are being sold compared to pre-pandemic levels.

However, the latest release of Marvel’s “Doctor Strange in the Multiverse of Madness” begins a steady stream of new and highly anticipated cinematic shows that will boost AMC’s ticket sales in the coming months.

“Our results for the first quarter of 2022 represent AMC’s strongest first quarter in two full years,” CEO Adam Aaron said in a statement Monday.

“The cumulative success of the “Spider-Man: No Way Home” films, “Batman”, “Sonic The Hedgehog 2” and the opening of “Doctor Strange in the Multiverse of Madness” this past weekend should leave no doubt about the enduring appeal of the theatrical show. “. “When Hollywood releases movies that moviegoers want to see, people flock in droves to movie theaters to watch movies that are designed to be seen, in theaters, on the big screen.”

While “No Way Home” and “The Batman” had strong showings in theaters and AMC saw nearly 40 million visitors during the quarter, revenue collected during the period did not exceed the nearly $1 billion spent on Operating expenses and rent.

The movie theater chain posted a net loss of $337.4 million, or 65 cents a share, compared to a loss of $567.2 million, or $1.42 a share, a year earlier.

Excluding items, the company lost 52 cents a share, a narrower loss than the 63 cents analysts had expected the company to lose during the quarter, according to a survey by Refinitiv.

Revenue rose to $785.7 million from $148.3 million last year, topping the $743 million analysts had expected.

AMC ended the quarter with $1.3 billion in available cash. The stock closed down 9% on Monday as the broader market suffered selling.

This is a breaking news story. . Please check back for updates