By Dhirendra Tripathi
Investing – AMC Entertainment (NYSE:AMC) stock looks set to weaken for the second consecutive day, trading 5% lower premarket after a near 18% fall Thursday.
The stock’s recent violent rally was abruptly cut short Thursday by the company’s announcement of a fresh issue of shares, of up to 11.55 million.
The movie theatre chain managed to complete the stock sale the same day, raising $587.4 million in the process with issue of maximum number of shares it intended to sell.
The exercise brings the total funds raised through equity issues to $1.24 billion. It did so in three instalments, each at a different price, in less than a month. Additionally, it filed a preliminary proxy on Thursday seeking permission to sell 25 million more shares in 2022.
AMC shares had more than doubled in Wednesday’s session a day after it issued 8.5 million shares to Mudrick Capital, which the hedge fund sold at a profit within a day of investing the money.
Its stock were at one point more than 3700% higher from their 52-week low, but this hasn’t changed the economic reality surrounding the company.
The pandemic has caused its long-term debt levels to soar to $5.4 billion as of the first three months of this year from less than $2 billion in 2016. And it’s still losing money, with analysts expecting another $100 million to go over the next 12 months.