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- AMC CEO says the company had completed its stock offering hours after it was planned
- Shares slid more than 30% yesterday, finished the session 18% lower
The AMC saga continued at full steam on Thursday, following the wild swing to the upside on Wednesday which led to the stock appreciating 95% and closing at a record high of $62.55. The latest twist came right at the opening bell yesterday when AMC shares nosedived over 30% in the initial moments of trading. The reason behind the massive drop was the selling of 11.5 million shares by the AMC’s internal stakeholders.
AMC Chief Executive Adam Aron said yesterday the movie theater operator has completed its stock offering that was announced in the morning on the same day. The company disclosed it had sold a total of 11.55 million shares at an average price of $50.85 a share in an at-the-market equity program. As a result, AMC has managed to raise $587.4mn in additional capital that will be used to cover some debt or open new movie theaters.
A filing with the SEC by AMC Entertainment from yesterday shows that the company had stated it intends to sell some of the 11.55 million shares “from time to time”. As it turned out, AMC executives had decided to offload the entire amount as the offering was completed in about three hours.
AMC’s Consolidated Standing
In another confusing move, typical for the speculative behavior of meme stocks, AMC shares rallied on the news that the offering has been completed and the capital has been raised. Around lunchtime, the stock was lifted off its lows and even managed to climb above the opening price. Later, the share price dipped again and finished the day 17.92% lower, or $11.21, to $51.34.
“Bringing in an additional $587.4 million of new equity on top of the $658.5 million already raised this quarter results in a total equity raise in the second quarter of $1.246 billion, substantially strengthening and improving AMC’s balance sheet, providing valuable flexibility to respond to potential challenges and capitalize on attractive opportunities in the future,” AMC CEO Adam Aron said in a statement.
The proceeds, according to the filing with the SEC, will be used 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.”
Other meme stocks were also part of the dizzying rally yesterday. GameStop shares declined about 10% to a session low at $246.68 but later moved slightly higher and ended the day down by 8.52%, or $24.06, to $258.18. BlackBerry posted mild gains as Reddit traders coordinated efforts to pile into speculative trading in the software company amid the AMC bamboozlement. Shares of BlackBerry advanced 4.13%, or $0.63, to finish the day at $15.88.
Still, after yesterday’s significant drop in AMC’s share price, the stock is higher by nearly 2,500% since the beginning of the year. GameStop comes as the second-best performer in individual stocks. Shares in the video-game retailer are up almost 1,400% year-to-date.
Both meme stocks are negative in pre-market trading ahead of the opening bell in New York this morning.
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