- Silver Lake sold its shares in AMC Entertainment for a profit of $ 113 million on Thursday, the company revealed.
- The private equity firm converted its debt into AMC shares after the stock price jumped on Wednesday.
- Reddit’s day traders sent AMC, GameStop and other stocks firing this week in a short squeeze.
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Silver Lake Partners, a privately held company and, until recently, a major investor in AMC Entertainment, disclosed in a regulatory document on Friday that it sold all of its capital in the company.
Silver Lake sold its shares for $ 713 million on Thursday, generating a profit of about $ 113 million on its initial investment, according to the document.
The move came close to the peak of AMC’s stock price hike this week, fueled in large part by Reddit day traders who targeted AMC short sellers, GameStop and other stocks, who have since lost about $ 19 billion. AMC shares were up 370% this week.
The increase this week triggered $ 600 million in convertible debt notes from Silver Lake, allowing the company to swap its risky debt for rising capital. The debt was finally exchanged for shares at a price of $ 13.51, according to a regulatory document on Thursday.
In Friday’s filing, Silver Lake said it sold its equity at an average price of $ 16.05.
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Silver Lake originally took over AMC’s $ 600 million debt in 2018 and injected an additional $ 100 million loan into the company while the pandemic ravaged its business, and AMC was still warning that it might have to file for bankruptcy, according to The Wall Street Journal.
But a cash injection of almost $ 1 billion on Monday and the rally fueled by Reddit this week helped AMC avoid that path for now.
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