Shares in AMC Entertainment are up in pre-market trading after the mega-exhibitor raised $325.5 million as part of a previously announced at-the-market equity offering.
The fresh capital for the parent of AMC Theatres came through the sale of 40 million shares at an average price of $8.14 as part of a funding round wrapped up on Sept. 6 to pay down debt. “The completion of this ATM equity offering significantly boosts AMC’s cash reserves, addresses current liquidity concerns and fortifies the balance sheet,” AMC said in a statement late Wednesday.
Stock in AMC Entertainment rose by 65 cents, or nearly 8 percent, to $8.89 in pre-market trading on the New York Stock Exchange on Thursday morning. AMC has used at-the-market stock offerings in the past to raise fresh capital.
The latest share issue follows the company converting AMC Preferred Equity Units, or so-called APEs, into the company’s common shares. The exhibition giant has argued in recent announcements that it must keep raising fresh cash to run its business, and that message was reiterated by AMC President and CEO Adam Aron as he talked about the latest capital raise.
“Raising more than $325 million in gross proceeds has bolstered our ability to survive and then thrive. As we navigate the recovery phase of our industry, this infusion of capital provides us with flexibility to assist us in navigating the waters ahead and continue delivering the magic of movies to our guests,” Aron said in a statement.
AMC will look to the latest capital raise to ride a Hollywood box office rebound at the multiplex as the COVID-19 crisis has faded, despite the company’s high debt load and disruption in its Hollywood movie pipeline from dual actors and writers strikes.
In early 2021, AMC became a popular stock among “meme” traders after the company appeared close to bankruptcy amid the pandemic fallout at movie theater chains. The stock surge helped the company strengthen its financial position and diversify its revenue streams — the latest initiative is starting to sell branded microwave and ready-to-eat movie popcorn varieties, initially at Walmart.
