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UPDATE: Private equity firm Silver Lake, which has been a major stakeholder in AMC Entertainment in recent years, has sold its entire position in the top movie chain after a dramatic increase in its inventory. .
In a filing with the SEC after trading closed, AMC said Silver Lake sold shares for between $ 14 and $ 24 per share, several times the price it traded three days ago. AMC stock, which saw a massive inflow of individual investment with GameStop, climbed nearly 300% for the week, ending today’s session at $ 13.19.
Silver Lake, whose media investments also include a large stake in Endeavor, converted $ 600 million of AMC debt into shares, then sold the shares on the open market at a handsome profit. Another AMC funder, Chinese group Wanda, reduced its stake in 2018, with Silver Lake taking over the $ 600 million in convertible notes.
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AMC Entertainment, GameStop shares retirement amid market shock in new breed of populist investors
PREVIOUSLY:
Shares of leading exhibitor AMC Entertainment climbed 53% on high trading volume as a betting frenzy by individual traders clustering online closed a week of havoc on Wall Street.
The rally left AMC stock at $ 13.19 heading into the weekend, almost triple what it was a week ago. He wiped out Thursday’s declines from the chain of theaters and a list of other besieged companies run by retailer GameStop, after several online brokers dragged down trading.
As the financial system scrambled for cures – and some investors filed class action lawsuits against online companies like Robinhood for blocking transactions – AMC pondered its options. Several press reports have indicated that the company is considering another sell-off of shares to turn stock market dynamics to its advantage. The company did not respond to Deadline’s request for comment.
Having managed to avoid bankruptcy during the 100-year Covid-19 disaster, the theater chain obtained much-needed relief earlier due to Wednesday’s spike in stocks. The company converted $ 600 million of debt into equity, selling shares to one of its major backers, private equity firm Silver Lake Group.
The role of Reddit-based individual investors in the stock market has sparked a fierce debate over speculation and whether Wall Street should be the province of so-called “professionals,” as opposed to this new breed of traders. The power of these loosely organized groups was seen as soon as several online trading platforms relaxed restrictions on certain stocks. Money poured in as retail investors looked to continue to pressure hedge funds and others bet some stocks would fall. GameStop climbed to $ 325 per share today, with trading volume twice as high as usual. The action started 2021 at $ 17.52.
The SEC responded to the fury over the volatile market action by saying it would investigate, even though a press release today was largely a collection of platitudes. “We will act to protect retail investors when the facts demonstrate abusive or manipulative business activity that is prohibited by federal securities laws,” the regulator said.
As a few stocks prospered, the Dow Jones Industrial Average, Nasdaq and S&P 500 all fell more than 1% and nearly all media and tech stocks ended the day in the red. The volatile moment for markets comes amid much wider uncertainty as investors struggle to predict how well coronavirus vaccines will boost economic recovery and whether Federal Reserve policies will help or l ‘will hinder.
In another twist in the AMC saga, the company before its share price surge had announced a groundbreaking new round of funding and a total of more than $ 900 million in new cash raised since December. Stating that “the sun is shining for AMC,” CEO Adam Aron said on Monday the company would have enough cash to last until the second half of 2021 even if the marquees remained dark.
Eric Wold, an analyst at B Riley who has an optimistic view of the exposure’s ability to bounce back from the pandemic, told Deadline that he suspects AMC is seriously considering cashing in again. Its shares, which have been stuck between $ 2 and $ 4 for most of the past year, soared 300% to nearly $ 20 on Wednesday. “I suspect they would like to have a little more cushion,” Wold said. “Why not take advantage of a price several times higher than it was before?”
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