AMC opens at all-time excessive, as traders shrug off hedge fund’s inventory sale
AMC multiplex cinema.
AMC Entertainment’s stock hit $ 37.52 on Wednesday, opening at an all-time high.
The move came when investors declined a report that a hedge fund had sold its AMC stake.
On Tuesday, AMC reported that it had sold 8.5 million newly issued shares to Mudrick Capital, the latest in a series of capital increases for Meme stock. The hedge fund later turned around and sold all of its AMC shares for a profit, according to a report from Bloomberg News.
AMC announced in a securities filing that it raised $ 230.5 million through a stock sale to the investment firm. The cinema operator said it would use the funds for potential acquisitions, modernize its cinemas, and reduce its balance sheet.
AMC’s business was effectively shut down during the pandemic as cinemas were closed for months in most of the country. With no money coming in from ticket sales and concessions, AMC fell behind with its rent. On the verge of bankruptcy, short sellers raved about the stock.
Private investors have used their growing numbers to fight back. According to data from S3 Partners, investors who sold the stock short lost an estimated $ 1.23 billion over the past week as the stock rose more than 116%. The stock is up more than 1,400% since the start of the year.
The company has made special efforts to communicate with this new investor base. On Wednesday it was said to have launched a new portal on its website for retail investors. The website has specials, including a tub of free popcorn.