AMC Exploits “Same Stock” Boom Again With Plans For Another Stock Sale

AMC has unveiled plans for another major stock sale, the movie chain’s latest move to capitalize on the commercial fervor of “memes stocks” that has boosted its market value by 600% over the past month.

The announcement comes a day after AMC’s promise to provide free popcorn to its investors, and two days after the company raised $ 230.5 million by selling 8.5 million new shares to the fund. speculative Mudrick Capital Management.

The latest announcement said AMC could sell up to 11.55 million common shares, with the proceeds going for general corporate purposes such as refinancing debt or buying new theaters.

The company cautioned, however, that “recent volatility and our current market prices reflect market and trading dynamics unrelated to our underlying business, or macroeconomic or industry fundamentals.”

News of free shareholder popcorn – an effort by the company to engage more closely with day traders – pushed stocks up 95% on Wednesday in significant volume.

“Under these circumstances, we do not recommend that you invest in our Class A common stock unless you are prepared to take the risk of losing all or a substantial part of your investment,” AMC said Thursday. deposit with the United States Securities and Exchange Commission said.

Last summer, car rental company Hertz, another stock that individual investors have skyrocketed, scrapped its $ 500 million share sale plan after coming under review thorough by the US securities regulatory authorities. The group had warned investors that the group’s equity value was likely zero because it was in bankruptcy proceedings at the time.

AMC has sought to use a flood of purchases by individual investors to shore up finances that have been severely strained by the coronavirus crisis, which has shut down theaters around the world.

The announcement of the new fundraising plan caused AMC shares to fall as much as 20% in pre-market trading before rebounding. Shortly before the opening bell, they were down about 8%.

At Wednesday’s close, AMC’s market value was $ 31 billion, up from $ 4 billion at the same time last month.

Meme stocks, preferred by retail investors trading stock advice on social media, captivated Wall Street in the first two months of 2021. After a period in which these stocks’ volumes appeared to be easing, the frenzy has resumed in recent weeks.

Technology group BlackBerry closed up 32 percent on Wednesday and rose another 13 percent in pre-market transactions in New York. Retailer Bed Bath & Beyond, which closed up 62% in the previous session, fell about 11% shortly before the opening bell.

About Vicki Davis

Check Also

ESMA Changes Derivatives Trading and Clearing Obligations to Facilitate LIBOR Transition

ESMA has proposed changes to the Clearing Obligation (CO) and Derivatives Trading Obligations (DTO) to …

Leave a Reply

Your email address will not be published. Required fields are marked *