AMC entertainment said Thursday it plans to sell more than 11 million shares amid the trading frenzy in its stock.
“Subject to the terms of the distribution agreement, we may from time to time offer and sell through our sales agents up to a total of 11,550,000 shares of our Class A common stock,” AMC said on a Securities and Exchange Commission 8K filing.
AMC stock reversed its price in early trading and lost 6% after plummeting more than 20% in early trading.
AMC Entertainment has drawn the attention of WallStreetBets audiences for the past few weeks, propelling the stock nearly 140% this week to an all-time high of $ 62.55 on Wednesday. AMC is up 512% this quarter and a whopping 2,850% this year.
In parallel with GameStop’s epic short squeeze in January, short sellers have increased their stakes against AMC stocks over the past month, potentially fueling the uptrend. According to S3 Partners, around 18% of the AMC shares available for trading will be sold short by Wednesday.
“We believe that recent volatility and our current market prices reflect market and trading dynamics unrelated to our underlying business or macro or industry fundamentals, and we do not know how long those dynamics will persist in our common stocks Class A unless you are willing to take the risk of losing all or a significant portion of your investment, “the company said on the 8K.
AMC said it plans to use the cash from the stock sale for “general corporate purposes,” which could include paying off existing debts and acquiring theater assets.
B. Riley Securities and Citigroup Global Markets are AMC’s sales agents for the sale of stocks.
Regardless, on Tuesday, AMC announced a sale of 8.5 million shares in Mudrick Capital at about $ 27.12 per share – worth about $ 230.5 million. The investment firm then sold its entire stake in AMC for a profit that same day, taking the pop of the stock. Bloomberg news reported.