AMC Entertainment (AMC) - Get Report shares were on the rise Tuesday, gaining more than 20%, after the movie-theater chain turned meme-stock mascot said it sold 8.5 million shares of its stock for another $230 million in fresh capital.
AMC shares were up 20.61% at $31.48 at last check after the company said in a filing that it had agreed to sell more of its Class A common stock to distressed credit-focused investment firm Mudrick Capital for a total value of $230.5 million.
The 8.5 million shares amounted to 1.7% of AMC's issued share capital, the company said.
Leawood, Kan.-based AMC in December had secured a commitment for debt financing from Mudrick Capital.
The move follows a pattern of AMC and its CEO Adam Aron taking advantage of extreme runups in its stock price thanks to massive waves of retail investors collectively encouraging one another to bid up the shares in an effort to unseat short-sellers, though in AMC’s case the stock has gotten a boost from a generally positive view that the movie-theater company’s worst days are over.
AMC was first caught up earlier this year in a wave of volatility amid a David-and-Goliath battle between retail investors using the online Reddit message board WallStreetBets to collectively push higher shares of GameStop (GME) - Get Report as well as Bed Bath & Beyond (BBBY) - Get Report, BlackBerry (BB) - Get Report and others.
The stock last Thursday posted its biggest one-day gain since January’s meme-stock retail-trading frenzy, pushing its market value past $10 billion for the first time.