Photographer: Dan Brouillette / Bloomberg
Photographer: Dan Brouillette / Bloomberg
AMC Entertainment Holdings Inc. is considering raising money by selling more shares, capitalizing on the unprecedented increase in its shares this week, according to people familiar with the matter.
A share sale would follow AMC announcing $ 917 million in new financing on Monday, which helped to avoid the threat of bankruptcy. On Wednesday said it completed a previously announced stock market program, raising $ 305 million.
AMC benefited from an investment frenzy fueled by Reddit that sent heavily sold shares into the stratosphere this week. Although stocks plummeted on Thursday – hampered by Robinhood and other trading platforms that restrict trading in its shares – AMC remains up 307% this year.
Reuters previously reported that AMC was considering another fundraising effort, which could help the besieged theater chain to resist the Covid-19 pandemic or reduce its debt.
In major markets, such as New York and Los Angeles, movie chains have failed to reopen locations. On Monday, AMC said attendance in the fourth quarter fell about 92% in the United States and 89% internationally from the previous year, and was burning money at about $ 124 million a month.
The company previously said it could seek more financing, and some creditors suggested selling more shares to pay off debts.
“With the recovery, they need to start cutting their capital structure,” said Jason Mudrick, whose company last month received a combination of bonds and shares in return for providing $ 100 million in new financing, he told Bloomberg earlier. “AMC should register more shares, sell as many shares as possible and use the money to pay off debts.”