AMC takes rally to sell stocks, but misses even bigger pay



[ad_1]

People walk past an AMC theater amid the coronavirus disease (COVID-19) pandemic in the Manhattan neighborhood of New York City, New York, United States, January 27, 2021. REUTERS / Carlo Allegri

(Reuters) – AMC Entertainment Holdings Inc said on Wednesday it raised $ 304.8 million by selling shares in an unprecedented social media-focused rally in its action, although the US film company could have raised some about four times more while waiting for one more day.

AMC was forced to raise capital to stay afloat after its ticket sales plummeted by 80% in the wake of the coronavirus outbreak. It avoided bankruptcy last year thanks to a debt restructuring deal with its lenders and private equity firm Silver Lake.

Shares of Leawood, Kansas-based AMC rose a total of 41% on Monday and Tuesday, as amateur investors, many of whom have organized online in forums such as Reddit’s WallStreetBest, decided to s ‘attack hedge funds bypassing the stock.

AMC revealed on Wednesday that it sold $ 304.8 million of shares on Monday and Tuesday, at an average price of $ 4.81 per share.

The company’s shares, however, jumped 310% on Wednesday as the speculative frenzy intensified. They closed at $ 19.90 a 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 how the speculative rally of the past few days in heavily shorted stocks, especially those of the video retailer GameStop Corp, presents both an opportunity and a challenge. for companies.

A CMA 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; Edited by Paul Simao

[ad_2]

Source link