AMC stock jumps after Aron demands Robinhood halt stock tokens

AMC shares rose about 7% in Friday trading after CEO Adam Aron demanded Robinhood stop trading tokenized assets tied to AMC stock and warned the company he would pursue legal action if trading continued.

Aron wrote that Robinhood was behind an effort to offer “tokenized real-world assets including Stock Tokens” for AMC and more than 190 other companies and stated AMC had not authorized or endorsed the program. He called the practice “contemptible, outrageous” and urged Robinhood to “CEASE AND DECIST.”

Robinhood’s website describes Stock Tokens as tokenized debt securities issued by Robinhood Assets (Jersey) Limited that provide investors with economic exposure to underlying shares but do not convey legal or beneficial ownership. The platform notes the tokens are not registered under U.S. securities laws and cannot be offered, sold or delivered in the United States or to U.S. persons, and that the products face restrictions in Canada, the U.K. and Switzerland.

Aron told Robinhood CEO Vlad Tenev the tokens raise “almost existential” questions about investor protections and corporate governance and argued an offshore offering that resembles share ownership could create the impression of shareholder rights, such as voting, without those rights attaching to the tokens.

Tenev publicly asked Aron to specify his concerns. Aron added that outside securities counsel would review whether AMC could compel Robinhood to halt trading if the company does not voluntarily comply.

AMC’s stock has climbed about 60% year to date. The company reported its strongest May attendance in seven years and attributed a strong second quarter to releases including The Odyssey and Spider-Man: Brand New Day, which supported demand for premium formats and lifted revenue.

AMC launched Leawood Films, a distribution venture aimed at bringing more small and medium-sized movies to theaters by using the company’s global screen network and marketing capabilities. Analysts described the initiative as an extension of AMC’s exhibition business with limited production risk and said it is unlikely to be a major earnings driver in the near term.

The company noted financial risks including elevated leverage, potential shareholder dilution and variable cash flow tied to the film release calendar.

Robinhood’s disclosure that the tokens are issued offshore and are not registered in the U.S. did not end Aron’s objections. AMC said it will pursue legal review and could seek options to stop trading of the tokens if Robinhood does not cease the program.