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Mudrick Capital Management, a hedge fund run by Jason Mudrick, quickly profited from the return of the meme stock trading frenzy after buying and quickly selling shares in the theater chain AMC Entertainment.
AMC announced on Tuesday that it had sold 8.5 million new shares to Mudrick at a price slightly higher than US$27 per share, raising US$230.5 million, and said it plans to use the proceeds to buy small movie theater chains that were troubled during the pandemic. “offend”.
According to a person familiar with the fund’s trading, Mudric had sold his entire position before the end of the day.
The exact size of the profit is not known, but the AMC share price reacted enthusiastically to the fundraising news. It soared to 33.53 US dollars in early trading on Tuesday, which was more than 28% higher than Friday’s closing price.
Mudric Capital Management declined to comment on the transaction. AMC Entertainment did not immediately respond to a request for comment.
AMC’s shares More than doubled Last week echoed the frenzy of retail investor trading in January, when the company was one of several “memetic stocks”-most notably GameStop-and was championed on social media such as Reddit discussion forums. r/WallStreetBets.
People familiar with the matter said that Mudric had been planning to sell the stock quickly, believing that the company was overvalued after the recent return of a deal promoted by Reddit.
By the afternoon in New York, AMC’s stock price had fallen back to $31.40, and it was still up about 20% that day.
Tuesday’s windfall was not the first time Mudric has profited from betting on AMC stock. Last year, when the closure of the movie theater threatened the company’s bankruptcy, it provided the company with a $100 million loan and used stock as a loan expense.with Earlier this year, It converted existing AMC bonds into new shares and sold them quickly. The two stock sales combined brought in a profit of US$200 million for the fund.
Troubled expert Jason Mudrick founded the company in 2009 and now manages approximately $3 billion in assets. According to a report by HSBC, Mudric’s Bad Opportunity Fund returned 11.3% to investors last year after deducting expenses.
Silver Lake Partners, a private equity firm, also took advantage of the soaring AMC share price this year driven by retail investors. In January of this year, it exercised its rights to swap US$600 million in AMC stocks and bonds, resulting in a profit of US$113 million.
In May of this year, Dalian Wanda, the long-term controlling shareholder of AMC, sold almost all of its 7% of its shares at a price of $14 per share.
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