AMC Stock Plunges After Theater Chain Announces Stock Sale to Raise $250 Million (2024)
Key Takeaways
AMC Entertainment announced a stock sale to raise $250 million, and shares sank.
The theater chain operator said the money was needed in part to make up for a weaker first-quarter box office because of last year's strikes by Hollywood writers and actors.
Last year, AMC held two other stock sales and a reverse stock split in order to raise cash.
AMC Entertainment (AMC) shares tumbled over 14% in intraday trading Thursday as the theater chain operator announced another stock sale to generate cash.
AMC wrote in a regulatory filing Thursday that it had entered into an equity distribution agreement with four financial institutions to sell shares of Class A common stock “from time to time” through an at-the-market offering, to raise a total of $250 million.
AMC said the money was needed in part because last year’s strikes by Hollywood writers and actors negatively impacted first-quarter box office receipts.
The company noted the funds would be used to “bolster liquidity, to repay, refinance, redeem or repurchase its existing indebtedness (including expenses, accrued interest and premium, if any) and for general corporate purposes.”
In November, shares sank when the company announced it was putting as much as $350 million of its Class A shares up for sale. That came just two months after it sold 40 million shares, bringing in $325 million. A month prior to that, AMC initiated a 1-for-10 reverse stock split to raise capital.
AMC shares sank more than 14% to $3.70 as of 11:45 a.m. ET. They hit an all-time low of $3.59 last month.
Sales have been falling this year, the result of a slate of films that has failed to excite moviegoers following the actors' strike. AMC also is struggling under a debt load that is too big—and coming due too soon—for a company its size.
AMC completes $250 million stock sale during meme rally, shares jump 30% The movie theater operator sold 72.5 million shares in an equity offering launched in March. The $250 million stock sale was finalized Monday during a revived meme stock craze triggered by the return of “Roaring Kitty.”
A heady market rally extended to a second day after Keith Gill, the trader known as Roaring Kitty who rallied small investors to buy out-of-favor stocks in the pandemic, returned to social media.
The sell-off in AMC shares came after the company announced a debt-for-equity swap. AMC will issue 23.3 million shares in a debt-for-equity exchange for $163.9 million of bonds that mature in 2026. The company also completed a $250 million stock sale on Monday.
Total revenues decreased to $1,030.6 million from $1,347.9 million, marking a 23.5% drop. There was a net loss of $32.8 million compared to net earnings of $8.6 million in Q2 2023.
Currently, price targets on AMC Entertainment range from a low $3.20 per share, to a high of $8 per share. On average, the analyst consensus price forecast for AMC comes in at around $5.54 per share, or around 15% above current prices.
What percentage of AMC Entertainment (AMC) stock is held by retail investors? According to the latest TipRanks data, approximately 71.41% of AMC Entertainment (AMC) stock is held by retail investors. Who owns the most shares of AMC Entertainment (AMC)? Vanguard owns the most shares of AMC Entertainment (AMC).
The AMC Entertainment stock holds a buy signal from the short-term Moving Average; at the same time, however, the long-term average holds a general sell signal. Since the longterm average is above the short-term average there is a general sell signal in the stock giving a more negative forecast for the stock.
While the company has not confirmed such a report, investors appear to have more optimism. AMC rallied 15% for the month of June, posting back-to-back monthly gains for the first time since January and February of 2023. And in July, it's still up 2% after initially thrusting 10% higher in the month.
Instead, it was largely retail investors congregating on forums like Reddit's WallStreetBets driving up share prices, with the movement reignited by a series of Sunday and Monday posts to X from “Roaring Kitty,” the account belonging to 37-year-old Keith Gill which became the mascot of 2021's meteoric gains from the ...
By the end of 2024, AMC's stock price is expected to soar to $9.70, marking an 85% increase from its current price. The upward trajectory is anticipated to continue, reaching $12.51 by the end of 2025, $15.99 by the end of 2026, and an impressive $30.82 by 2033. Several factors are influencing this long-term growth.
By the end of 2024, AMC's stock price is expected to soar to $9.70, marking an 85% increase from its current price. The upward trajectory is anticipated to continue, reaching $12.51 by the end of 2025, $15.99 by the end of 2026, and an impressive $30.82 by 2033. Several factors are influencing this long-term growth.
By nearly every metric, AMC Entertainment is a bad investment. The company is unprofitable, heavily indebted, running out of cash, and may file for bankruptcy in the not-too-distant future. Its share price has declined nearly 90% in the last year and is trading as a penny stock.
AMC has struggled since the pandemic amid a slow return to theaters from moviegoers. In the company's most recent quarter, reported on May 8, AMC produced revenue of $951.4 million, down from $954.4 million in the same quarter a year prior.
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