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AMC Entertainment Gains on Share Sale to Mudrick Capital

AMC Entertainment rises as the movie-theater chain turned meme-stock mascot pulls in another $230 million in fresh capital from a stock sale.

AMC Entertainment  (AMC)  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.

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AMC shares remained entrenched in the spotlight Friday, surging more than 25% early amid a fresh frenzy for meme stocks, though gave up those gains, ending the trading day down 2.17%.

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.

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