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AMC Entertainment was halted for volatility several times early Thursday after a newly announced capital raise. The stock fell 14% in morning trading while the preferred equity "APE" units surged nearly 90%. Shares were still down 13% in the afternoon. The movie-theater operator raised $110 million by selling APE units to hedge fund Antara Capital. The fund will also exchange $100 million of AMC debt for roughly 91 million APE units.
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In addition, AMC is proposing a reverse stock split of AMC common shares at a 1-to-10 ratio. The capital raise and proposed reverse stock split come a day after AMC said it was no longer in talks to buy theaters from Regal parent company Cineworld, which filed for bankruptcy earlier this year. In a securities filing, AMC said discussions with Cineworld lenders regarding assets in the U.S. and Europe had ended.
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AMC itself had been on the brink of bankruptcy in 2021, but was able to avert it after millions of retail investors turned its shares into a meme stock. The company has since devised several plans to raise more capital to reduce its debt and invest in acquisitions and its theaters.