AMC Entertainment said it has completed its new stock offering announced just Thursday morning, raising $587.4 million in additional capital.
The company said it sold 11.55 million shares at an average price of approximately $50.85 per share in an at-the-market equity program launched earlier Thursday.
When AMC announced the offering, it said in a filing it may sell some of the 11 million shares “from time to time.” Apparently that time was now as it completed the offering in about three hours.
In a curious move typical of the meme stocks, the shares rallied off their lows on news of the completed sale as retail investors cheered the capital raised and looked past the dilution of their stakes.
Shares of the movie theater chain reversed higher at one point following the news. The stock ended the day 18% lower, paring its week-to-date gain to 96%.
“Bringing in an additional $587.4 million of new equity on top of the $658.5 million already raised this quarter results in a total equity raise in the second quarter of $1.246 billion, substantially strengthening and improving AMC’s balance sheet, providing valuable flexibility to respond to potential challenges and capitalize on attractive opportunities in the future,” AMC President and CEO Adam Aron said in a statement.
AMC, the star of the show in Reddit’s WallStreetBets forum, has soared more than 140% this week alone as retail traders continued to encourage each other to pile into the speculative name. The shares have skyrocketed more than 2,900% this year.
On Wednesday, the company announced a new portal to connect with individual investors and offered free popcorn, exclusive screenings and other perks to those who hold its stock. The shares rallied 95% that day.
So-called short covering could be contributing to AMC’s massive rally as of late. On Wednesday, short sellers betting against the stock lost $2.8 billion, bringing their year-to-date losses to more than $5 billion, according to S3 Partners. Short sellers are forced to buy back the stock to cut their losses amid a sudden rally.
While AMC’s latest surge is reminiscent of the GameStop mania earlier this year, many on Wall Street believe the movie theater chain won’t cause a turmoil in the overall market like GameStop did. Back in January, GameStop’s short squeeze caused liquidity headaches at hedge funds and brokerage firms that spiked volatility in the broader market and raised concerns about financial stability.