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AMC Stock Price Rallied 8% After a $325.5M Discounted Fundraise

Analyst Team trader
Updated 14 Sep 2023

The AMC Entertainment Holdings Inc (NYSE: AMC) stock price rallied 8% after announcing that it had raised $325.5 million after issuing 40 million new shares priced at $8.14 each. The at-the-market (ATM) equity offering launched on September 6, 2023.


YOUR CAPITAL IS AT RISK. 81% OF RETAIL CFD ACCOUNTS LOSE MONEY.


Most AMC investors were unhappy with the equity offering, given that it would be significantly dilutive to their current holdings, but the company needed the money. The company has been losing money since the COVID-19 pandemic wreaked havoc in the movie theatre industry via the months-long closures of movie theatres.

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The company has also struggled to attract moviegoers despite releasing multiple blockbuster movies, necessitating the recent capital raise. The company noted that completing the ATM equity offering would significantly boost its cash reserves, address its current liquidity concerns and fortify its balance sheet. 

AMC noted that combined with the 39% surge in the industry’s box office earnings in Q3 compared to last year, the proceeds from the ATM equity offering would allow it to continue along its successful recovery guide path. 

The company expects to continue navigating the changing market dynamics, including the ongoing strikes by writers and actors due to the additional funds, which will help it capitalise on opportunities to strengthen its balance sheet further. 

AMC also highlighted the record-breaking success of the highly-anticipated TAYLOR SWIFT THE EARS TOUR concert film. The Eras Tour concert movie will open on October 13, 2023, in leading movie theatre chains such as AMC and Cinemark.

The movie is expected to attract large audiences to the movie theatres, and AMC is looking to profit from the same. However, we’ll have to wait and see how much revenue the concert film will generate once it is released. 

Adam Aron, the AMC President and CEO, said: “The successful completion of this equity offering marks another significant milestone for AMC. Raising more than $325 million in gross proceeds has bolstered our ability to survive and then thrive. As we navigate the recovery phase of our industry, this infusion of capital provides us with the flexibility to assist us in navigating the waters ahead and continue delivering the magic of movies to our guests.” 

AMC stock price. 

AMC Entertainment's (AMC) stock price was trading up 8.01% at $8.90, adding to yesterday’s 8.85% rally.


YOUR CAPITAL IS AT RISK. 81% OF RETAIL CFD ACCOUNTS LOSE MONEY.


The AskTraders Analyst Team features experts in technical and fundamental analysis, as well as traders specializing in stocks, forex, and cryptocurrency.