AMC Entertainment shares fell substantially on Wednesday after the theater operator announced in a filing that it plans to sell up to 40 million new shares to fund cash.The price fell 36.8%, reaching $8.62 per share. According to FactSet, that is AMC's lowest split-adjusted closing on record.Following the successful conversion of preferred APE shares into …
AMC Entertainment shares fell substantially on Wednesday after the theater operator announced in a filing that it plans to sell up to 40 million new shares to fund cash.
The price fell 36.8%, reaching $8.62 per share. According to FactSet, that is AMC’s lowest split-adjusted closing on record.
Following the successful conversion of preferred APE shares into AMC common stock in August, AMC was widely expected to sell further shares. It came after the settlement of a lawsuit filed against the move.
After becoming one of the so-called meme stocks popular with retail traders, the theater chain has sold millions of shares of ordinary stock in recent years. After the Covid epidemic effectively crippled the theatre movie business, the sales helped AMC stabilize.
AMC, on the other hand, had exhausted its allotment of stock and required shareholder approval to issue additional. The preferred APE shares were issued as part of a strategy to modify its corporate voting structure and gain shareholder permission to sell more common stock.
AMC stated in the filing on Wednesday that the new shares will be sold through “at-the-market” offerings with no timetable. The filing names Citigroup, Barclays, B. Riley Securities, and Goldman Sachs as sales agents.
The film industry in the United States remains below pre-pandemic levels, and persistent strikes in Hollywood have muddled the release schedule for the remainder of 2023 and 2024. AMC and pop diva Taylor Swift announced last week that the theater company will be the distributor for The Eras Tour concert film, which will be released in October.
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