Equity

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  Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our&nbsp;<a href="https://tokenist.com/terms-of-service/" style="text-decoration:underline;color:#3c7b7b" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">website policy</a>&nbsp;prior to making financial decisions. 
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<p class="has-drop-cap">Shares of AMC Entertainment rallied over 8% in Thursday premarket trading after the company said in a press release it had completed the at-the-market equity offering. Notably, AMC secured $325.5 million in fresh capital by selling 40 million shares at an average price of approximately $8.14 apiece.&nbsp;</p> 
<h3 id="amc-boosts-balance-sheet-and-cash-reserves">AMC Boosts Balance Sheet and Cash Reserves</h3> 
<p>AMC Entertainment said it has wrapped up its previously announced ATM equity funding round, raising around $325.5 million in fresh capital. Through the offer launched on September 6, the movie theater chain operator sold 40 million shares at an average price of $8.14 per share before commissions and fees.</p> 
<p>Following the news, the company’s shares surged 9.2% in premarket trading Thursday.</p> 
<p>The financing represents a much-needed boost for AMC’s cash reserves, balance sheet, and liquidity issues. In addition to fresh capital, AMC witnessed a 39% quarter-to-date surge in the industry box office annually and capitalized heavily on the record-breaking success of the ‘Taylor Swift: The Eras Tour’ film.</p> 
<blockquote class="wp-block-quote"> 
 <p>“The successful completion of this equity offering marks another significant milestone for AMC. Raising more than $325 million in gross proceeds has bolstered our ability to survive and then thrive.”</p> <cite>– said AMC President and CEO Adam Aron. </cite> 
</blockquote> 
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<h3 id="controversy-around-amc-s-new-equity-offering">Controversy Around AMC’s New Equity Offering</h3> 
<p>AMC’s new share sale undoubtedly marks a significant stimulus for the company’s financial health. However, the fundraising is seen as a somewhat controversial event. The answer to why is that the case lies in 2021.</p> 
<p>Two years ago, <a aria-label="AMC became a 'meme stock' (opens in a new tab)" href="https://www.cnbc.com/2022/01/26/how-amc-rode-the-meme-stock-rally-to-revitalize-its-business.html" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">AMC became a ‘meme stock’</a> after its battered share price skyrocketed after an orchestrated initiative by a group of retail investors. The company took advantage of this frenzy and issued fresh equity, which it sold to raise $587 million.&nbsp;</p> 
<p>However, due to its charter, the cinema chain operator faced restrictions on issuing new shares. AMC issued a preferred share class known as AMC Preferred Equity units (APEs) to address this issue. Subsequently, AMC proposed to convert APEs into common shares and carry out a 1:10 reverse stock split, but the move was delayed after the company <a aria-label="got sued by shareholders (opens in a new tab)" href="https://www.reuters.com/legal/amc-hit-with-fresh-class-action-lawsuit-over-stock-conversion-2023-08-15/#:~:text=AMC%20agreed%20to%20settle%20the,a%20shareholder%20vote%20against%20them." target="_blank" rel="noopener noreferrer nofollow" class="deco-link">got sued by shareholders</a> who had not endorsed the conversion.</p> 
<p>Later, <a href="https://tokenist.com/amc-down-21-premarket-as-ape-conversion-lawsuit-settled/" rel="noopener noreferrer nofollow" class="deco-link">AMC settled the lawsuit</a>, allowing it to <a href="https://tokenist.com/amcs-ape-to-cease-trading-from-25th-aug/" rel="noopener noreferrer nofollow" class="deco-link">proceed with the APE conversion</a> and reverse stock split plan. But the legal triumph was followed by a substantial crash in AMC’s shares, which lost roughly 70% of value in a few days.&nbsp;</p> 
<p>The stock price <a href="https://tokenist.com/amc-falls-19-as-firm-offers-to-sell-40m-shares/" rel="noopener noreferrer nofollow" class="deco-link">took another beating</a> on September 6 after AMC revealed plans to sell 40 million common shares, bringing its 1-year losses to 90%. What’s particularly intriguing is that AMC issued warnings about the substantial risks associated with investing in its shares at the time, creating a paradox as the company simultaneously sought to encourage investors to participate in its latest share offering.</p> 
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<p><em><strong>All things considered, do you think AMC sits in a better position than before after its recent actions? Let us know in the comments below.&nbsp;</strong></em></p> 
<p>The post <a rel="noopener noreferrer nofollow" href="https://tokenist.com/amc-up-in-premarket-after-raising-325-5m-by-selling-40m-shares/">AMC Up in Premarket After Raising $325.5M by Selling 40M Shares</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://tokenist.com">Tokenist</a>.</p>

AMC Up in Premarket After Raising $325.5M by Selling 40M Shares

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