AMC Announces Stock Offering (Shares Plummet to All-Time Low)

AMC Entertainment Holdings (AMC), the movie theater giant, saw its shares plummet by a staggering 36.8% on Wednesday following its announcement of an upcoming stock offering.

The company revealed its intention to sell up to 40 million shares of its Class A common stock, a move that rattled investors.

amc announces stock offering
Watch the video on Bloomberg

This stock offering, detailed in a filing, will be conducted through an “at-the-market” offering program and spread “from time to time.”

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Notably, Citigroup Global Markets, Barclays Capital, B. Riley Securities, and Goldman Sachs are the designated sales agents, entitled to a commission of up to 2.5%.

AMC emphasized that the capital raised through this offering would serve multiple purposes, including enhancing liquidity, repaying, refinancing, redeeming, or repurchasing existing debt, and supporting general corporate needs.

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However, the company’s prospectus issued a cautionary note to potential investors, characterizing the purchase of its stock as “highly speculative and involves risk.”

This latest development comes shortly after AMC secured court approval for a different strategy aimed at bolstering its capital.

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This involved converting AMC Preferred Equity (APE) shares into common shares, which paved the way for a 1-for-10 reverse stock split.

Unfortunately, this maneuver contributed to the sharp decline in AMC’s share price.

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Pavlos Written by:

Hey — It’s Pavlos. Just another human sharing my thoughts on all things money. Nothing more, nothing less.

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