Grab popcorn!AMC soars to new highs as the meme army sticks to the line | Business and Economic News


AMC Entertainment Holdings Inc. is really inclined to this entire meme-stock phenomenon.

On Wednesday, the theater chain announced that it would reward small investors who played an important role in this year’s crazy and illogical 1,400% share price rise of AMC, and provide special screenings and free popcorn and other goodies. A day ago, AMC used these huge proceeds to directly raise US$230 million from one of its major creditors, Mudric Capital Management, and supported its financial situation.

Although Mudrick quickly dumped all of its shares to obtain considerable profits, and said the company was severely overvalued, the Reddit retail trader did nothing. Encouraged by the public support of AMC, the stock soared 93% on Wednesday to an intraday record, and then the stock was temporarily suspended in New York. Earnings pushed AMC’s market value to approximately $28 billion, surpassing GameStop.

“Many of our investors have shown support and confidence in AMC… After all, these people are the owners of AMC and I work for them,” AMC CEO Adam Aron (Adam Aron) said in a statement on Wednesday Means in.

The statement stated that as of March 11, more than 3.2 million individuals held AMC shares, accounting for more than 80% of its investor base. Earlier last month, Aron spoke directly with many of these new investors during AMC’s quarterly conference call, cheering for their enthusiasm, commitment, and enthusiasm.

He then urged skeptical stock analysts to pay attention to these investors—”read what these people wrote,” he told them.

In the United States, few other executives welcome the new influence of the retail industry as much as Aron. Again, few companies owe them so much.

Just a few months ago, AMC was on the verge of bankruptcy. Before that, a group of day traders was bent on breaking the old-school conventions about company value and rising around its stocks. Using online platforms such as WallStreetBets, these small traders joined forces and adopted hashtags such as #AMCSTRONG and #AMCSqueeze on Twitter.

Together with GameStop, AMC has become a typical representative of meme stock craze, which has attracted the market and confuses Wall Street professionals.

Current transactions indicate that the company’s market value exceeds 18 billion U.S. dollars, even if the chain is burdened with more than 5 billion U.S. dollars in debt and shareholders’ equity, the loss per share exceeds 5 U.S. dollars.

“Obviously, the fundamentals simply don’t support the common stock level (which makes sense to the Reddit crowd),” Mark Levin of Asterisk Advisors said in a report.

Buy and sell

Some savvy investors like Mudric see the huge stock price rise as a unique opportunity to make quick profits.

In the US market, it is relatively rare to raise cash by selling equity to a single holder. It is almost unheard of to have holders sell stocks immediately after purchase. In this case, Mudric’s role in the AMC issuance is somewhat similar to that of the underwriter in the public offering. The specific purpose of the underwriter’s purchase of shares is to resell the shares to investors.

A Mudrick representative declined to comment, and AMC in Leawood, Kansas did not respond to a request for comment.

In a statement disclosing the offering, Aron stated that the transaction with Mudrick “will enable us to actively pursue the most valuable theater assets, and make other strategic investments in our business, and seek opportunities for deleveraging. .”


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