UPDATED with results of share sale, closing stock price. AMC Entertainment said it raised $587.4 million from the sale of 11.55 million shares in an at-the-market transaction.
The average price of the shares was $50.85, the top owner of movie theaters said.
After wild fluctuations during the trading day that saw AMC stock trade between $37.66 and $68.80, shares closed at $51.31, down 18%.
The latest stock sale proceeds, added to $658.5 million earlier in the quarter, brings the total equity raise to $1.246 billion during the second quarter, CEO Adam Aron said.
The new funds will be “substantially strengthening and improving AMC’s balance sheet,” Aron said, “providing valuable flexibility to respond to potential challenges and capitalize on attractive opportunities in the future.”
As one of the top meme stocks — up more than 2,500% in 2021 to date — AMC finds itself with new strategic options but the volatility of the stock is a significant element. In a rare move, the company itself has sought to warn individual investors to proceed with caution should they choose to buy into the story.
AMC Entertainment, which has been surfing a wave of retail enthusiasm over its meme-worthy stock, has decided to cash in and sell 11.6 million shares.
The No. 1 exhibitor announced the plan this morning in an SEC filing. Shares in the company, which had surged above $60 a share this week, giving the once-nearly-bankrupt company a market value of $28 billion, have sold off today in the early going. Nearly an hour into the trading day, they were at about $50, down 20%.
A warning to investors was included with the details about the share sale. The company cautioned “against investing” in its common stock, unless investors “are prepared to incur the risk of losing all or a substantial portion” or their money.
There are now about 3 million retail investors in AMC — about 80% of its shareholders — after investors mobilized on Reddit and other online forums. The company’s stock followed the improbable trajectory of GameStop and other companies whose shares are moving in inverse proportion to their financials. On Wednesday, regulators halted trading twice on AMC as it spiraled upward.
In its filing, AMC said it would use sale proceeds for “general corporate purposes, which may include the repayment, refinancing, redemption or repurchase of existing indebtedness, acquisition of theatre assets, working capital or capital expenditures and other investments.”
Earlier this week, the company sold 8.5 million shares to investment firm Mudrick Capital, which turned around and sold the $230 million position the same day. While the whipsaw action made a lot of Wall Streeters shake their heads, CEO Adam Aron described the stock sale as a “very smart raising of cash so that we can grow this company.”
The stock drama is occurring against the backdrop of a revitalized North American box office, which saw A Quiet Place Part II and Cruella post strong opening weekends over Memorial Day.
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