AMC Entertainment Holdings and its investors have opted to take advantage of their recent Reddit-inspired share-price surge.
The movie-theater giant said Thursday that a group of investors including units of private-equity firm Silver Lake have opted to convert all $600 million of the cinema chain's 2.95% convertible senior notes due 2026 into stock at a price of $13.51 a share.
Shares of AMC closed at $19.90 on Wednesday, up more than 300% from Tuesday alone following a wild ride that saw the stock more than quadruple since Monday after being carried higher by a wave of anti-short-selling momentum led by retail investorsacting on banter on the Reddit message board, WallStreetBets.
Shares of AMC plunged last month after it filed with the Securities and Exchange Commission to offer as many as 50 million shares in an effort to stave off bankruptcy. That filing came on top of 200 million shares it filed for earlier in the month.
However, AMC repeatedly has raised capital throughout the pandemic to bolster its liquidity and stay afloat - something CEO Adam Aron on Monday said officially takes Chapter 11 off the table for the Leawood, Kansas-based company.
Even before the Reddit-induced wave, investors were already betting on a comeback for AMC. The company’s shares soared on Monday after announcing that it had raised $917 million in debt and equity.
On Monday morning, AMC stock stood at $4.60, up 31.2%. At last check on Thursday, AMC shares were down 19.53% at $15.99, still up more than fourfold for the week.