AMC Files to Sell 11.5 Million Shares, Advises Investors Not to Buy as Stock Tumbles
AMC Entertainment, which has been on a wild ride the past few days, and whose stock was halted multiple times yesterday because of its volatility, said it has filed to sell 11.5 million shares of its stock.
The stock ($AMC) immediately tumbled and was down 30% this morning. It also was halted again this morning.
“We believe that the recent volatility and our current market prices reflect market and trading dynamics unrelated to our underlying business, or macro or industry fundamentals, and we do not know how long these dynamics will last,” the company said in a Securities and Exchange Commission filing. “Under the circumstances, we caution you against investing in our Class A common stock, unless you are prepared to incur the risk of losing all or a substantial portion of your investment.”
The company said it intends to use the net proceeds from the sale “for general corporate purposes, which may include the repayment, refinancing, redemption or repurchase of existing indebtedness, acquisition of theatre assets, working capital or capital expenditures and other investments,” according to the filing.
The frenzy yesterday, aided by Reddit threads and notably the subthread WallStreetBets, triggered several trading halts, an event that happens often when a stock becomes too volatile. Barron’s reports that the stock was up 90% earlier in the day, something that “doesn’t happen all that often–even in so-called meme stocks.
The stock is up nearly 140% this week to an all-time high of $62.55 on Wednesday and is up 512% this quarter as well as a whopping 2,850% this year, according to CNBC. The market value has ballooned to above $31 billion.
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