AMC uses rally to sell stocks, but misses even bigger paycheck
(Reuters) – AMC Entertainment Holdings Inc said on Wednesday it raised $ 304.8 million by selling shares in an unprecedented rally of its shares on social media, although the US film company could have raised around four times more while waiting for one more day.
AMC was forced to raise capital to stay afloat after its ticket sales plunged 80% in the wake of the coronavirus outbreak. He avoided bankruptcy last year thanks to a debt restructuring deal with his lenders and private equity firm Silver Lake.
Shares of Leawood, Kansas-based AMC rose 41% cumulatively on Monday and Tuesday as amateur investors, many organized online in forums such as Reddit’s WallStreetBest, decided to take action. to hedge funds by short selling the stock.
AMC said on Wednesday that it sold $ 304.8 million in shares on Monday and Tuesday, at an average price of $ 4.81 per share.
The company’s shares, however, surged to 310% on Wednesday as the speculative frenzy intensified. They closed at $ 19.90 per share, about 301% higher on the day. If AMC had sold the same number of shares at that price, it would have raised $ 1.26 billion.
While AMC may decide to sell more stocks in the next few days, the money it left on the table shows just how much of the speculative rally in recent days in heavily shorted stocks, especially the retailer. of GameStop Corp videos, presents both an opportunity and a challenge. for companies.
An AMC spokesperson did not respond to a request for comment.
AMC, which also operates UK Odeon Cinemas, said on Monday it had already raised enough money to rule out possible bankruptcy. Through a combination of debt and equity issuances, it has raised $ 917 million since mid-December to help cushion the blow of the pandemic.
Report by Greg Roumeliotis in New York; Editing by Paul Simao