Mudrick Capital no longer owns debt or shares in AMC, sources say

Mudrick Capital no longer owns debt or shares in AMC, sources say


Closed signs are seen at an AMC theater during the coronavirus disease (COVID-19) outbreak in New York City on April 29, 2020.

Brendan McDermid | Reuters

Investment firm Mudrick Capital liquidated its debt and equity positions in AMC Entertainment, sources tell CNBC David Faber, as the movie theater chain’s shares continue to trade wildly amid a speculative retail boom.

AMC announced earlier this week that it had sold 8.5 million shares to Mudrick for $ 230.5 million. The hedge fund was also involved in a key $ 100 million debt restructuring deal with AMC in December.

AMC has been one of the top meme stocks whose share price has risen significantly following high interest from retail traders on Reddit. Even with a 18% decrease Thursday, the stock is still up 96% this week.

The theater chain, which saw its activity effectively closed during the pandemic, took advantage of the rise in the share price to raise funds.

The company sold an additional 11.5 million shares on Thursday for $ 587 million. CEO Adam Aron told YouTube host Trey Collins he wanted to post a 25 million additional shares.

AMC had $ 5.5 billion in long-term debt and $ 842 million in cash until the end of March, according to FactSet. But the company said it would use the last raised capital to further pay off this heavy debt.

The company could also use the funds to buy other theaters, AMC said.

Bloomberg News first reported that Mudrick had liquidated his stake in AMC.

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