AMC entertainment said it had completed its new share offering announced Thursday morning and raised $ 587.4 million in additional capital.
The company said it sold 11.55 million shares at an average price of about $ 50.85 per share under a share program launched Thursday.
When AMC announced the offer, it said in a filing that it could “from time to time” sell some of the 11 million shares. Apparently that time had come now that the offering would be completed in about three hours.
In an odd move typical of meme stocks, stocks rebounded from their lows on news of the sale being completed as retail investors cheered the capital raised and looked over the dilution of their holdings.
The cinema chain’s stocks rose 4% after losing more than 30% on Thursday.
“The contribution of an additional $ 587.4 million in new equity on top of the $ 658.5 million raised earlier this quarter results in a total capital increase of $ 1.246 billion in the second quarter, significantly strengthening AMC’s balance sheet and improves and provides valuable flexibility to respond to potential challenges and to seize attractive opportunities in the future, “said AMC President and CEO Adam Aron in a statement.
AMC, the star of the show on Reddit’s WallStreetBets forum, is up more than 140% this week alone as retailers continued to encourage each other to stack the speculative name. Shares have soared more than 2,900% this year.
On Wednesday the company announced new portal for contacting individual investors and offered free popcorn, exclusive shows, and other perks to those who hold his shares. The stock gained 95% that day.
So-called short coverings could recently contribute to the massive rally of AMC. On Wednesday, short sellers betting against the stock lost $ 2.8 billion, bringing their year-to-date losses to more than $ 5 billion, according to S3 Partners. Short sellers are forced to buy back the stock to reduce their losses amid a sudden rally.
While AMC’s recent surge to the GameStop Mania earlier this year, many believe on Wall Street the cinema chain will not cause turbulence in the overall market, as GameStop has done. Back in January, GameStop’s short squeeze caused liquidity problems for hedge funds and brokerage firms, which increased volatility in the broader market and raised concerns about financial stability.