AMC’s stock fell 5% after the company finalized a $350 million stock offering.
Shares of AMC Entertainment Holdings Inc. fell more than 5% Tuesday after the company completed its latest market share offering, raising about $350 million.
The equity capital was raised through the sale of approximately 48 million shares at an average price of approximately $7.29 per share. AMC AMC,
said in a statement released late Monday.
AMC’s move is the latest in the company’s efforts to reduce its debt burden, which will exceed $5 billion in 2022. The stock offering, launched on November 9, and the debt repurchase or debt-to-equity exchange will reduce the company’s debt by $62.28 million. , AMC said.
“Raising equity capital by an additional $350 million and reducing debt by more than $62 million in one month strengthens liquidity and reduces debt levels,” AMC CEO Adam Aron said in a company statement. “It demonstrates our continued efforts to strengthen our balance sheet through systematic reductions.” .
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Shares of AMC ended Tuesday’s session down 5.5%. The stock is down 81.3% in 2023 compared to the SPX’s 21% gain in the S&P 500 index.
The stock offering brings AMC’s total cash raised since Sept. 1 to $675 million and total cash raised in 2023 to $865 million, Aron said on Twitter Tuesday. .
“We know there are people on social media who are questioning these strategies, sometimes loudly,” he added. “But they don’t have the responsibility of leading a multibillion-dollar company under very difficult circumstances, and they fundamentally don’t understand how absolutely critical, indeed essential, it is for AMC to have solid cash reserves.”
Aron has repeatedly warned that movie theater chains face liquidity problems.
The first Mimstock Love turned into a surplus and recorded positive net profit for the second consecutive quarter in the third quarter results announced last month. AMC ended the quarter with $729.7 million in cash.
Related: AMC’s strong third quarter results boost movie theater stocks
