- Silver Lake sold its shares in AMC Entertainment on Thursday for a profit of $ 113 million, the company announced.
- The private equity firm converted its debt into equity in AMC after Wednesday’s share price appreciation.
- Reddit day traders sent out AMC, GameStop and other stocks in a short time this week.
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Silver Lake Partners, a private equity firm and, until recently, a major investor in AMC Entertainment, announced in a regulatory filing Friday that it has sold all of its shares in the company.
Silver Lake dumped its shares for $ 713 million on Thursday, making a profit of about $ 113 million on the initial investment, the filing said.
The move came near the peak of AMC’s stock price rise this week, fueled largely by Reddit day traders targeting short-sellers of AMC, GameStop and other stocks, which have since lost about $ 19 billion. AMC shares were up a whopping 370% this week.
This week’s rise triggered $ 600 million in Silver Lake’s convertible debt securities, allowing the company to exchange its risky debt for rising equity. The debt was eventually converted into stock at a price of $ 13.51, according to a legal filing on Thursday.
In Friday’s filing, Silver Lake said it had sold its stock at an average share price of $ 16.05.
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Silver Lake originally raised $ 600 million in AMC debt in 2018 and pumped an additional $ 100 million loan into the business when the pandemic devastated its business, and AMC still warned it might have to file for bankruptcy, according to The Wall Street Journal.
But a cash infusion of nearly $ 1 billion on Monday and the Reddit-powered rally this week have helped AMC avoid that path for now.
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