Shares of AMC Entertainment Holdings Inc. lost ground in volatile trading on Thursday when a movie operator announced plans to sell 11.55 million fresh shares in the morning, saying it had sold them about six hours later and then demanded the right from investors. release more after the call.
AMC Stock Exchange
closed at 17.9% to $ 51.34, after growing from 39.8% to 10.0% as a result of daytime trading. Shares later fell about 5% at the end of trading when AMC announced an offer to shareholders to sell more shares.
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The stock was suspended three times on Thursday due to instability, all within the first half hour after opening. The sell-off session comes after shares rose 95.2% on Wednesday and 417.8% over the previous seven sessions amid rising interest in meme shares.
“We believe that the recent instability, our current market prices, reflects market dynamics that have nothing to do with the underlying business or macro or industry fundamentals. We do not know how long that dynamic will last.”
AMC on Thursday evening at 12 o’clock. In a statement issued in 1958, he said that he had completed the “market” (ATM) program, which was revealed at 7 o’clock in the morning. 04 in the Securities and Exchange Commission in 8-K document.
Shares fell about 23% before AMC announced the end of its share-selling program.
The company said it raised about $ 587.4 million from the sale of shares, which was made at an average price of $ 50.85. Although that price was 1.0% lower than the closing price, it was 25.9% higher than the median minimum of $ 37.66. According to FactSet, the weighted average price was $ 53.83.
“By investing an additional $ 587.4 million in new equity instead of the $ 658.5 million already raised this quarter, total capital growth in the second quarter was $ 1.246 billion, significantly strengthening and improving AMC’s balance sheet to provide a valuable response.” flexibility. “Potential Challenges և Capitalize on attractive opportunities in the future,” said CEO Adam Aron.
Following the day-to-day trading session, AMC issued a statement to the Securities and Exchange Commission stating that it would require shareholders to issue up to 25 million shares. In the past, AMC had planned to require shareholders to issue up to 500 million new shares, about as much as is currently in circulation, but canceled the plans after a stir from investors. Instead, the theater network will look for a smaller number of confirmations; by 2022 it will not be able to sell any of the shares included in the approval.
“In order to successfully navigate the road, we seek to raise all the financial tools that can help us,” Aron said in a statement. “Issuing shares is a great tool for any company, if only if the opportunity to create the right value is created.”
Shares have risen 402.8% to date, while cinema operator Cinemark Holdings Inc. CNK shares,
acquired 13.0% և S&P 500 index SPX,
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AMC signed an ATM agreement with B. Riley Securities Inc. և Citigroup Global market Inc. with sales agents. about $ 14.7 million.
The number of shares sold represented about 2.6% of the shares traded as of May 2.
The company has stated that it intends to use the proceeds from the sale of shares for general corporate purposes, which may include debt repayment, acquisition of theater assets or capital expenditures.
AMC acknowledged in its 8-K document that the recent “extreme fluctuations” in its shares were accompanied by reports of “strong, unpopular interest from retailers, including on social media and online forums.” As a result, AMC’s stock sale plan comes as a warning to retailers.
“We believe that the recent instability, our current market prices, reflect market dynamics that have nothing to do with the underlying business or macro or industry fundamentals. We do not know how long that dynamic will last,” the company said in a statement. in the announcement. “Under the circumstances, we warn you against investing in our Class A common stock unless you are willing to risk losing all or most of your investment.”
MarketWatch employee writer rem Jeremy S. Owens contributed to this article.