By Greg Roumeliotis
(Reuters) – AMC Entertainment Holdings Inc said on Wednesday it had raised $304.8 million by selling shares during an unprecedented social media-driven rally in its stock, though the U.S. movie theater firm could have raised about four times more by waiting one more day.
AMC was forced to raise capital to stay afloat after its ticket sales plunged 80% in the wake of the coronavirus outbreak. It staved off bankruptcy last year thanks to a debt restructuring deal with its lenders and private equity firm Silver Lake.
Shares of Leawood, Kansas-based AMC rose a cumulative 41% on Monday and Tuesday, as amateur investors, many of them organized online in forums such as Reddit’s WallStreetBest, decided to take on hedge funds shorting the stock.
AMC disclosed on Wednesday that it had sold $304.8 million worth of stock on Monday and Tuesday, at an average price of $4.81 per share.
The company’s shares, however, jumped as much as 310% on Wednesday as the speculative frenzy intensified. They closed at $19.90 a share, about 301% higher on the day. Had AMC sold the same number of shares at that price, it would have raised $1.26 billion.
Although AMC could decide to sell more stock in the coming days, the money it left on the table shows how the speculative rally of the last few days in heavily shorted shares, particularly those of video retailer GameStop Corp, presents both an opportunity and a challenge for companies.
An AMC spokesman did not respond to a request for comment.
AMC, which also operates Britain’s Odeon cinemas, said on Monday it had already raised enough money to rule out a potential bankruptcy. Through a combination of debt and equity issuance, it has raised $917 million since the middle of December to help cushion the blow from the pandemic.
(Reporting by Greg Roumeliotis in New York; Editing by Paul Simao)
