Mudrick Capital reportedly on Tuesday sold its stock in AMC Entertainment (AMC) - Get Report, the same day that the theater chain disclosed that it had sold $230.5 million of its shares to the distressed-credit-focused investment firm.
AMC said in a Tuesday statement that it had sold 8.5 million shares to Mudrick at a per-share price of $27.12. The 8.5 million shares amounted to less than 1.7% of AMC's issued share capital, its chief executive, Adam Aron, said.
Shares of the Leawood, Kan., company ended the regular session up 23% at $32.04. In after-hours trading shares rose $5.96, or 19%, to $38.
The investment firm now holds no AMC shares. It sold at a profit, Bloomberg reported, citing a person familiar with the matter.
The firm disposed of its stake after concluding that AMC’s stock is overvalued, propped up by a recent wave of day-trader enthusiasm, Bloomberg said.
AMC in December had secured a commitment for debt financing from Mudrick Capital.
The sale to Mudrick had followed a pattern of AMC taking advantage of extreme runups in its stock price. Those runups have occurred as massive waves of retail investors collectively encouraged one another to bid up the shares in an effort to unseat short-sellers.
AMC stock also has gotten a boost from a generally positive view that the movie-theater company’s worst days are over.
Neither Mudrick nor AMC immediately responded to a request for comment.
AMC earlier this year was first caught up in a wave of volatility amid an effort by retail investors using the online Reddit message board WallStreetBets to collectively push up shares of GameStop (GME) - Get Report as well as Bed Bath & Beyond (BBBY) - Get Report, BlackBerry (BB) - Get Report and others.
Last Thursday AMC 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.