Traders work on the floor of the New York Stock Exchange, Aug. 22, 2022.
Brendan McDermid | Reuters
Shares of AMC Entertainment fell sharply on Wednesday after the theater chain said in a filing that it plans to sell up to 40 million new shares to raise cash.
The stock dropped 36.8%, bringing it to $8.62 per share. On a split-adjusted basis, that is AMC’s lowest close on record, according to FactSet.
AMC’s stock fell sharply on Wednesday.
AMC was widely expected to sell additional shares after the successful conversion of the preferred APE shares into AMC common stock in August. It followed the settlement of a lawsuit objecting to the move.
The theater chain sold millions of shares of common stock in recent years after becoming one of the so-called meme stocks popular with retail traders. The sales helped AMC stabilize itself after the Covid pandemic effectively halted the theatrical movie business.
However, AMC used up its allotment of stock and needed shareholder approval to issue more. The company issued the preferred APE shares as part of a strategy to change its corporate voting structure and get shareholder approval to sell additional common stock.
AMC said in the filing Wednesday that it will sell the new shares through “at-the-market” offerings, without a specific time frame. Citigroup, Barclays, B. Riley Securities and Goldman Sachs are listed as sales agents in the filing.
The U.S. movie business remains below pre-pandemic levels, and the ongoing strikes in Hollywood have clouded the release slate for the rest of 2023 and 2024. AMC and pop star Taylor Swift announced last week that the theater chain is serving as the distributor for a concert movie of The Eras Tour to be released in October.