Shares of AMC Entertainment Holdings, Inc. (NYSE: AMC) have skyrocketed in pre-market trading Thursday following the successful completion of the stock offering, wherein the cinema chain managed to secure approximately $325.5 million through the sale of 40 million shares. The move comes in response to address a cash crunch that has loomed over the cinema chain during the turbulent times of the pandemic.
The offering began on September 6, and shares were sold at an average price of $8.14 each, as confirmed by AMC Entertainment in a statement on Wednesday. The beleaguered company, which has grappled with dwindling box office sales since the onset of the pandemic, views this financial infusion as a lifeline.
CEO Adam Aron, elated with the outcome, stated,
“Raising more than $325 million in gross proceeds has bolstered our ability to survive and then thrive.”
This move, however, was met with mixed reactions from AMC investors, as it had a dilutive effect, leading to an 80% drop in the company shares this year. However, Adam Aron, the CEO of AMC, is optimistic that the company is now better positioned to benefit from an industry recovery. In addition, the cinema giant expects to see a significant boost in revenue with the release of the Taylor Swift concert film in October.
Furthermore, AMC Entertainment (NYSE: AMC) believes this stock sale will help it weather the ongoing Hollywood strikes involving writers and actors.
As of the latest update, AMC Entertainment Holdings stock is trading at $8.76, up 6.31% compared to the previous trading session.
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