cashed in on its Reddit rally in a big way.
shares rocketed higher Thursday after the company said it raised about $428 million in a stock sale.
AMC Entertainment stock (ticker: AMC) closed up nearly 24% at $12.77 on Thursday, after management said it completed a 43 million share at-the-market equity offering, begun April 29, raising about $428 million before commissions and fees. That implies an average selling price of about $9.95 a share—far above the stock’s 52-week low of $1.91.
“Bringing in an additional $428 million of new equity capital will immediately buttress and fortify our liquidity profile,” CEO
said in a news release. “The additional cash raised puts AMC in a stronger position to tackle the challenges and capitalize on the opportunities that lie ahead.”
AMC Entertainment was among the stocks beloved by users on Reddit’s WallStreetBets forum, who in January made headlines for their bets on highly shorted companies, especially GameStop (GME). Aron even acknowledged the crew during an earnings call earlier this month.
“Just go on Twitter, just go on Reddit, just go on YouTube, read what these people write,” Aron said. “They love AMC. And these are not people who are just going to be investors in AMC. These are going to be customers of AMC who come to our theaters and enjoy watching movies at our theaters as paying guests.”
Some on Wall Street had wondered if AMC could survive the pandemic with theaters closed and viewers turning to streaming services. But the company has managed to raise cash at a critical time. Though it isn’t out of the woods yet, AMC’s efforts raising capital have given it a chance to benefit from the easing of pandemic-related restrictions.
On the WallStreetBets forum, users celebrated the stock’s rise in their typical all-caps, expletive-laced fashion, which included plenty of rocket ship emojis. “Bagholding since Jan 29, just went green,” wrote one user, with a profane name. “Same. 30 @ $13.88. I just want out,” replied a user called stinkypickles.
Some big players cashed in months ago. Early in the year, after AMC stock rallied in the wake of
‘s run, the private-equity firm Silver Lake converted $600 million of AMC debt into shares. It turned around and sold the stake for $713 million.