AMC's debt load may be reduced with the help of its meme stock windfall.

• The surge in AMC shares since Friday's close can be attributed to the return of meme stock architect "Roaring Kitty."
• The movie theater chain was able to avoid bankruptcy the last time retail investors rallied around AMC and its stock surged.
• Its substantial debt load can be reduced by putting a dent in it.

Can capitalize on a second meme craze?

The stock of AMC surged this week after Keith Gill, the man who inspired the massive short squeeze of 2021, posted online for the first time in nearly three years. The return of Roaring Kitty has led AMC shares to more than double since Friday's close, and they rose above $6 in afternoon trading Tuesday.

AMC avoided bankruptcy the last time retail investors rallied around its stock, and now it has another opportunity to reduce its significant debt burden.

In a short period after becoming CEO in 2015, Adam Aron made three significant acquisitions, including theater chains Carmike, Odeon and Nordic, according to Eric Handler, managing director at Roth MKM. The total cost of these deals was approximately $3 billion.

The acquisitions increased the size of AMC's theater network, but also put pressure on the company's balance sheet, Handler stated.

When the pandemic struck, they faced a double blow because they were already highly leveraged and had to borrow more money to stay afloat, according to Handler.

Nearly $1 billion of AMC's debt has been paid off since the start of 2022, leaving around $4.6 billion remaining.

The $2.96 billion that AMC is due to collect in 2026 is the most pressing issue, according to Wedbush analyst Alicia Reese, despite the $20 million and $118 million due in 2024 and 2025, respectively, not being a significant challenge.

Reese informed CNBC that he believes they will be able to renegotiate a portion of it, but a significant portion may simply get extended maturities.

A rise in stock price may enable AMC to obtain more favorable loan terms.

AMC is currently paying around $100 million every quarter in interest expenses, which is negatively impacting its potential profits. Due to the ongoing pandemic and strike-related production shutdowns, AMC has not been able to cover its fixed expenses, such as rent, employee payroll, and operational costs, according to Eric Wold, senior analyst at B. Riley Securities.

"Whether or not they can take advantage of this to bolster their balance sheet is what matters to him," he said.

The cinema chain, AMC, raised $250 million of new equity capital through the sale of 72.5 million shares in an at-the-market equity offering that started in late March. The average price of the stock sold was $3.45 per share before commissions and fees. The majority of the stock was sold prior to the stock price jump.

Barrington Research analyst James Goss stated in a note to investors on Tuesday that the recent increase in the stock provides an extra chance to obtain equity funds, which can aid in maintaining liquidity and reducing debt, ultimately making AMC more suitable for institutional backing.