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AMC has become the new favorite after GameStop as both shares and other heavily shorted stocks have been pushed to new highs this year.
The shares of American theatre company AMC Entertainment Holdings Inc (NYSE: AMC) closed the Thursday trading session at a 20.40% loss following highly volatile intra-day activities. Per a CNBC report, the down plunge came after the company said it had sold as much as 11.55 million shares at an average price of approximately $50.85 per share in an at-the-market equity program launched earlier on Thursday. The company raised as much as $587.4 million, boosting its capital accrual agenda.
In this second quarter alone, AMC has pulled over $1.2 billion in capital raise.
“Bringing in an additional $587.4 million of new equity on top of the $658.5 million already raised this quarter results in a total equity raise in the second quarter of $1.246 billion, substantially strengthening and improving AMC’s balance sheet, providing valuable flexibility to respond to potential challenges and capitalize on attractive opportunities in the future,” AMC President and Chief Executive Officer Adam Aron said in a statement.
The company’s shareholders reacted positively when the news about the new capital raise broke with the shares rallying off their intraday low after dropping down to $37.66. The shares recorded some wavy growths trading as high as $67.63 before trading settling at $51.34 billion.
AMC Encouraging Retail Shares Buyup
AMC, a meme stock that has rallied as much as 3,000% in 2021 is popular on the Reddit forum WallStreetBets. AMC has become the new favorite after GameStop Corp (NYSE: GME) as both shares and other heavily shorted stocks have been pushed to new highs this year.
The theatre chain executives are not oblivious to the Reddit-fueled retail buyup of its shares and have launched what appears to be a loyalty program for holders of its shares. The company has created a Portal to connect with its individual shareholders. The platform provides shareholders with exclusive promotions, like free or discounted items and invitations to special screenings, as well as direct communications with Aron.
“During my five-plus year tenure as CEO at AMC, I’ve taken great pride in the relationships I have forged with AMC’s owners,” Aron said in a statement Wednesday. “With AMC Investor Connect, that effort in relationship building will continue apace even if our shareholders now number in the millions. After all, these people are the owners of AMC, and I work for them.”
While AMC shares are seeing a run around its all-time high price of $62.55 established on Wednesday after soaring over 95%, analysts are bearish on the company in the long term. The consensus price target for the stock is pegged at $5.11, according to FactSet.