UPDATE: The private equity firm Silver Lake, which has been one of the biggest stakeholders in AMC Entertainment in recent years, has sold its entire position in the top movie theater chain following a dramatic boom in its stock.
In a SEC filing after the end of trading, AMC said Silver Lake sold shares between $ 14 and $ 24 per share, many times the price at which it traded as recently as three days ago. AMC shares, which had a huge supply of individual investments and GameStop, rose nearly 300% this week, ending today’s session at $ 13.19.
Silver Lake, whose media investments also include a significant stake in Endeavor, converted $ 600 million of AMC debt into equity and then sold the shares on the open market at a good profit. Another AMC supporter, China’s Wanda Group, lowered its stake in 2018, with Silver Lake assuming the $ 600 million convertible notes.
Related story
AMC Entertainment, GameStop shares retreat amid market shock among new breed of populist investors
PREVIOUS:
Shares in top exhibitor AMC Entertainment rose 53% on heavy trading volume as a frenzy of bets by individual traders working together closed a week of devastation on Wall Street.
The upswing left AMC shares at $ 13.19 over the weekend, nearly tripling from where they were a week ago. That wiped out Thursday’s decline in the theater chain and a roster of other beleagured companies led by retailer GameStop, after several online brokers restricted trading.
As the financial system sought remedies – and some investors filed lawsuits against online businesses like Robinhood for blocking transactions – AMC revoked its options. Several press reports state that the company is still considering a sale of shares to promote the share in its favor. The company did not respond to Deadline’s request for comment.
After the theater chain managed to fend off bankruptcy during the 100-year catastrophe of Covid-19, it received much-needed relief earlier due to the stock boom on Wednesday. The company converted $ 600 million in debt into equity and sold shares to one of its key supporters, the private equity firm Silver Lake Group.
The role of Reddit-based individual investors in the stock market has sparked a heated debate over speculation and whether Wall Street should be the province of so-called ‘professionals’, as opposed to this new kind of traders. The power of these loosely organized groups was seen once several online trading platforms eased restrictions on certain stocks. Money flowed back when retail investors wanted to go further in pushing in hedge funds and others betting that certain stocks would fall. GameStop shot up to $ 325 a share today, with trading volume at twice its normal levels. The stock started at 2021 at $ 17.52.
The SEC responded to the anger over the volatile market action by saying it was going to investigate, although a press release today was largely a collection platitude. “We will act to protect retail investors when the facts show offensive or manipulative trading activities prohibited by federal security laws,” the regulatory body said.
As some stocks outperformed, the Dow Jones Industrial Average, Nasdaq and S&P 500 all fell more than 1% and almost all media and technology stocks ended the day in the red. The turbulent moment for the markets comes amid much wider uncertainty as investors struggle to predict how quickly coronavirus vaccines will boost economic recovery and whether Federal Reserve policy will help or hinder it.
In another twist to the AMC saga, the company announced a breakthrough in the new financing round before the rise in its share price, raising a total of more than $ 900 million in new cash since December. CEO Adam Aron, declaring that the ‘sun is shining for AMC’, said on Monday that the company will have enough liquidity to hold on until the second half of 2021, even if markets remain dark.
Eric Wold, an analyst at B Riley, who has an optimistic view of the exhibition’s ability to jump back to the pandemic, told Deadline he suspects AMC will strongly consider earning it again during the run-up . Its shares, which have been hovering between $ 2 and $ 4 for most of the past year, rose 300% to nearly $ 20 on Wednesday. “I suspect they want a little more pillow,” Wold said. “Why not use a price that was many times as much as before?”