AMC Will Ask Investors for OK to Sell More Stock
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AMC stock has gained more than 2,300% this year.
Photo by Tom Cooper/Getty ImagesAMC Entertainment —whose stock has gained more than 2,300% this year amid a rally in so-called meme stocks—has raised $1.25 billion through stock sales this quarter alone. The movie-theater chain will ask shareholders to authorize another 25 million shares at its annual meeting on July 29.
If approved, AMC (ticker: AMC) could issue such shares starting in 2022. The number is significantly smaller than a previous request to authorize 500 million shares that was later withdrawn. The company pointed to opportunities such as debt reduction, investments in theaters, as well as mergers and acquisitions.
After nearly doubling to $62.55 on Wednesday, the company filed for a 11.6 million stock sale program Thursday morning. AMC completed the offering in a matter of hours, selling stock at an average price of $50.85 a share.
Shares fell Thursday on the news and ended the day sharply lower. Some investors homed in on a warning the company provided in its filing: “Under the circumstances, we caution you against investing in our Class A common stock, unless you are prepared to incur the risk of losing all or a substantial portion of your investment.”
AMC earlier this week said it sold 8.5 million shares to investment firm Mudrick Capital, which reportedly sold its stake at a profit that same day.
Although stock sales have helped AMC raise much-needed cash, such sales dilute existing shareholders. AMC CEO Adam Aron said in Thursday’s filing that shareholders “can be confident that we would only issue shares if we believe that doing so will create value for you, our supportive owners.”
AMC stock was down 7.7% in premarket trading on Friday.
Write to Connor Smith at connor.smith@barrons.com