what happened
Shares of beleagured theater operator AMC Entertainment Holdings (NYSE: AMC) gained another 85% at the open market on Friday and recovered a 58% profit at 09:55 EST.
The Reddit user gathering continues after Robinhood opened up a number of highly volatile names involved in the ongoing phenomenon.
Approximately
AMC tried to capitalize on the stock price moment earlier this week by raising more than $ 300 million worth of shares at a share price of $ 4.81. It seemed like a good move at the time, as the stock had more than doubled from two weeks before.
But the irrational moves in the Reddit-related names helped boost shares to $ 20 a share until Wednesday, following AMC’s capital hike. Now Reuters reports that AMC is discussing another capital increase as the stock trades close to $ 13 per share.
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Now what
As early as Monday, the theater operator told investors that it had raised $ 917 million in debt and equity since mid-December 2020, as the company continues to struggle with theater closures, limited capabilities and film release delays. AMC President and CEO Adam Aron said in a statement on Monday: “This means that any talk of a looming bankruptcy for AMC is completely off the table.”
But the stock has tripled this week amid the short press action. It would make sense to raise all the capital in this area. Traders trying to get into the action should be very careful as the larger folly theory plays out. If AMC does price another share offering, it will show that even the company does not believe that the current inflated valuation is real and lasting.