AMC Stock Doubles, Completes $250M Share Sale Amid Meme Craze

AMC Preferred Stock NYSE:APE

AMC Entertainment Holdings Inc. (NYSE:AMC) has successfully raised $250 million through the issuance of 72.5 million shares, according to a recent SEC filing. This equity offering, which was initially set in motion on March 28, coincided with a resurgence in meme stock trading activities. The spike in AMC’s share price followed a renewed interest in meme stocks, catalyzed by Keith Gill, better known as “Roaring Kitty,” whose enthusiastic endorsement of GameStop Corp. (NYSE:GME) reignited the meme stock frenzy.

On Monday, AMC’s stock price soared, closing with an increase of over 78%, while GameStop also experienced a surge, closing nearly 75% higher. Both stocks continued their upward trajectory, approximately doubling in value thereafter. The shares were offloaded at $3.45 each, with prices reaching as high as $10.70 by 8:30 a.m. on Tuesday.

Despite challenges due to a sluggish recovery in moviegoer attendance post-pandemic, AMC reported a slight decrease in revenue year-over-year in its latest quarterly results, with figures dipping from $954.4 million to $951.4 million. However, the company saw an improvement in its financial health, reducing its loss per share from $1.71 a year ago to $0.62 in the most recent quarter.

Wedbush analyst Alicia Reese noted on May 9 that AMC is making efforts to manage its substantial debt, which totals $4.6 billion. Reese highlighted that the company’s debt levels were a major concern, overshadowing some positive developments. She also mentioned AMC’s potential for revenue growth through upgrading theaters in its European circuit, which could enhance per-screen revenue averages, though significant financial restructuring is expected to take priority over the next two years.

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