Investment firm Mudrick Capital has its debt and equity positions in AMC entertainment, Sources tell CNBCs David Faberas the cinema chain’s stock continues to trade wild amid a speculative retail boom.
AMC announced earlier this week that it had sold 8.5 million shares to Mudrick for $ 230.5 million. The hedge fund was also involved in a major $ 100 million debt restructuring deal with AMC in December.
AMC was one of the top meme stocks, whose share price has risen dramatically due to the high level of retail interest in Reddit. Even with one 18% decrease on Thursday, the stock is still up 96% this week.
The cinema chain, whose business during the the coronavirus pandemic, has used the rising share price to raise cash.
The company sold an additional 11.5 million shares on Thursday for $ 587 million. CEO Adam Aron told YouTube host Trey Collins that he was one an additional 25 million shares.
According to FactSet, AMC had $ 5.5 billion in long-term debt and $ 842 million in cash as of the end of March. But the company said it will use the latest capital to further pay off that heavy debt burden.
The company can also use the funds to buy other theaters, AMC said.
Bloomberg News first reported that Mudrick had left his equity position in AMC.