AMC shares fall as the company announces plans to sell additional shares

Traders work on the floor of the New York Stock Exchange, August 22, 2022.

Brendan McDermid | Reuters

Shares of AMC Entertainment fell sharply on Wednesday after the theater chain said in a report submission that it plans to sell up to 40 million new shares to raise cash.

The stock fell 36.8% to trade at $8.62 per share. According to FactSet, this is AMC’s lowest closing price on record on a split-adjusted basis.

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AMC shares fell sharply on Wednesday.

It was widely expected that AMC would sell additional shares following the successful conversion of APE preferred stock into AMC common stock in August. This was followed by the settlement of a lawsuit against the move.

The theater chain sold millions of common shares in recent years after becoming one of the so-called meme stocks popular with retail traders. The sales helped AMC stabilize after the Covid pandemic brought its theatrical film business to a virtual standstill.

However, AMC had exhausted its share quota and needed shareholder approval to issue additional shares. The Company issued the APE preferred shares as part of a strategy to change the Company’s voting structure and seek shareholder approval for the sale of additional shares of common stock.

AMC said in Wednesday’s filing that it will sell the new shares through “at-market” offerings with no specific time frame. Citigroup, Barclays, B. Riley Securities and Goldman Sachs are listed as trading agents in the filing.

The U.S. film business remains below pre-pandemic levels, and ongoing strikes in Hollywood have clouded release schedules for the remainder of 2023 and 2024. AMC and pop star Taylor Swift announced last week that the theater chain is serving as a distributor for an Eras Tour concert film coming out in October. AMC shares fall as the company announces plans to sell additional shares

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