Photographer: Dan Brouillette / Bloomberg
Photographer: Dan Brouillette / Bloomberg
AMC Entertainment Holdings Inc. is considering raising money by selling more shares, taking advantage of the unprecedented rise in shares this week, according to people familiar with the matter.
A stock sale would follow AMC announcing $ 917 million in new financing on Monday, helping to avoid the threat of bankruptcy. On Wednesday it is said it completed a previously announced stock market program, raising $ 305 million.
AMC has benefited from a Reddit-fueled investment frenzy that sent heavily short-short stocks into the stratosphere this week. Although the stock plummeted Thursday – hurt by Robinhood and other trading platforms that are holding its stock trading in check – AMC remains 307% higher this year.
Reuters previously reported that AMC is considering another fundraising campaign that could help the beleaguered theater chain weather the Covid-19 pandemic or reduce debt burdens.
In major markets such as New York City and Los Angeles, movie theater chains have been unable to reopen locations. Monday, AMC said fourth-quarter turnout fell 92% in the US and 89% internationally from a year earlier, burning money at about $ 124 million a month.
The company has previously said it may be looking for more funding, and some creditors have proposed selling more shares to pay off debt.
“With the rally, they need to start getting rid of their capital structure,” Jason Mudrick, whose company last month received a combination of bonds and stock in exchange for providing $ 100 million in new financing, previously told Bloomberg. “AMC should register more shares, sell as many shares as possible, and use the money to pay off debt.”