AMC jumps another 20%, ignoring stock sale by hedge fund
AMC multiplex cinema.
Actions of AMC Entertainment continued to rise on Wednesday, rising to 30% in pre-market trading as investors ignored news that a hedge fund had sold its stake in AMC.
On Tuesday, AMC announced that it has sold 8.5 million newly issued shares to Mudrick Capital, the latest in a series of capital increases for the share itself. The hedge fund then turned around and sold all of his AMC shares for a profit, according to a Bloomberg News report.
AMC said in a securities filing that it raised $ 230.5 million through a sale of shares to the investment firm. The theater operator said it would use the funds for potential acquisitions, modernizing its theaters and deleveraging its balance sheet.
AMC’s operations were effectively halted during the pandemic, as theaters were closed in most countries for months. Without money from ticket sales and concessions, AMC fell behind on rent. On the verge of bankruptcy, short sellers have swarmed the stock.
Retail investors have used their growing numbers to fight back. Last week, investors who sold the security short would have lost $ 1.23 billion while stocks rose more than 116%, according to data from S3 Partners. The stock is up more than 1,400% since the start of the year.
The company has made special efforts to communicate with this new investor base. On Wednesday, it announced that it had launched a new portal on its website for its retail investors. The site includes special offers, including a free jar of popcorn.