(Reuters) – AMC Entertainment Holdings Inc said Wednesday it had raised $ 304.8 million selling stock during an unprecedented social media-driven rally in its stock, even though the American movie theater company could have made about four times more in one more day to wait.
AMC was forced to raise capital to keep it afloat after ticket sales fell 80% in the wake of the coronavirus outbreak. The bankruptcy was avoided last year thanks to a debt restructuring deal with its lenders and private equity firm Silver Lake.
Shares of Leawood, Kansas-based AMC were up 41% Monday and Tuesday as amateur investors, many of whom were organized online in forums such as Reddit’s WallStreetBest, decided to buy hedge funds that were short on stocks.
AMC announced Wednesday that it had sold $ 304.8 million worth of stock on Monday and Tuesday at an average price of $ 4.81 per share.
However, the company’s shares rose as much as 310% on Wednesday as the speculative frenzy intensified. They closed at $ 19.90 a share, up about 301% on the day. If AMC had sold the same number of shares at that price, it would have fetched $ 1.26 billion.
While AMC might decide to sell more shares in the coming days, the money on the table shows how the speculative rally in the past few days in heavily shorted stocks, particularly that of video retailer GameStop Corp, is both an opportunity and a challenge. offers. for companies.
An AMC spokesperson did not respond to a request for comment.
AMC, which also operates British Odeon cinemas, said it had already raised enough money on Monday to rule out a possible bankruptcy. Through a combination of debt and equity issues, it has raised $ 917 million since mid-December to cushion the blow of the pandemic.
Reporting by Greg Roumeliotis in New York; Editing by Paul Simao