Update: The private equity company Silver Lake, which was one of the largest shareholders in AMC Entertainment In recent years, it has completely sold out its top spot in the best movie theaters series after a massive increase in its inventory.
In a file provided by the Securities and Exchange Commission after trading closed, AMC said Silver Lake sold shares at between $ 14 and $ 24 per share, which is twice the price it was last traded three days ago. AMC shares, Which has seen massive inflows of individual investment side by side GameStop, It rose nearly 300% during the week, closing the day’s session at $ 13.19.
Silver Lake, whose media investments also include a large stake in Endeavor, converted $ 600 million of AMC’s debt into equity and then sold shares on the open market at a good profit. Another supporter of AMC, the Chinese Wanda Group, reduced its stake in 2018, assuming Silver Lake $ 600 million in convertible bonds.
AMC Entertainment and GameStop retreat in the midst of a market shock in a new breed of populist investors
Shares of AMC Entertainment, the largest exhibitor, surged 53% amid heavy trading volume, as it ended a wave of bets by individual traders who gathered together online, a week of ruin on Wall Street.
The rally left AMC stock at $ 13.19 at the weekend, three times what it was a week ago. Erased Declines on Thursday From the theater chain and a list of other besieged companies led by retailer GameStop, after several online brokers placed restrictions on trading.
While the financial system was looking for remedies – some investors filed class action lawsuits against online companies such as Robinhood To block deals – AMC has been considering its options. Multiple press reports have stated that the company is considering another share sale to shift equity momentum in its favor. The company did not respond to a request for a deadline for comment.
Having managed to stave off bankruptcy during the 100-year-old Covid-19 disaster, the theater chain earlier got some much-needed relief from rising stocks on Wednesday. The company converted $ 600 million in debt into equity and sold shares of a major supporter, the private equity firm Silver Lake Group.
The role of Reddit retail investors in the stock market sparked an intense debate about speculation and whether Wall Street should be a boycott of so-called “professionals”, as opposed to this new type of traders. The strength of these loosely organized groups was seen once many online trading platforms loosened restrictions on certain stocks. Money poured in again as retail investors were looking to keep putting pressure on hedge funds and others betting some stocks down. GameStop stock surged to $ 325 a share today, with volume at double their normal levels. The stock started 2021 at $ 17.52.
The Securities and Exchange Commission (SEC) responded to outrage over volatile market actions by saying they would investigate, although today’s press release was largely a bunch of platitudes. “We will act to protect retail investors when facts prove that there is abusive or fraudulent trading activity prohibited under federal securities laws,” the regulator said.
With a few stocks booming, the Dow Jones Industrial Average, Nasdaq and S&P 500 all fell more than 1% and nearly all media and technology stocks closed the day in the red. The precarious moment for the markets comes amid broader uncertainty as investors struggle to forecast how quickly coronavirus vaccines will spur economic recovery and whether Fed policy will help or hinder it.
In another twist to the AMC saga, before the share price increase, the company announced a new round of financing and more than $ 900 million in new cash has been raised since December. Announce it “The sun is shining on AMC,” CEO Adam Aaron said Monday that the company will have enough cash to last into the second half of 2021 even if the umbrellas remain dark.
Eric Wold, an analyst at B Riley who has an optimistic view of the show’s ability to recover after the pandemic, told Deadline that he suspects AMC will seriously consider making money again upon launch. Its shares, which have been stuck between $ 2 and $ 4 for most of last year, rose 300% to nearly $ 20 on Wednesday. “I think they want more of the pillow,” he said. “Why not benefit from a price that increases many times what it was before?”