Mudrick Capital not owns any debt or fairness pursuits in AMC, in line with sources

Investment firm Mudrick Capital has ditched both its debt and equity positions in AMC Entertainment, CNBC’s David Faber sources say, as the cinema chain’s stocks continue to trade wildly amid a boom in speculative retailing.

AMC announced earlier this week that it had sold 8.5 million shares to Mudrick for $ 230.5 million. The hedge fund was also involved in a major $ 100 million debt restructuring deal with AMC in December.

AMC was one of the top meme stocks, whose share price rose dramatically due to the high level of retail interest in Reddit. Even with an 18% decline on Thursday, the stock is still up 96% this week.

The cinema chain, whose business effectively closed during the coronavirus pandemic, has used the rising share price to raise cash.

The company sold an additional 11.5 million shares on Thursday for $ 587 million. CEO Adam Aron told YouTube host Trey Collins that he plans to issue an additional 25 million shares.

According to FactSet, AMC had $ 5.5 billion in long-term debt and $ 842 million in cash as of the end of March. But the company said it will use the latest capital to further pay off that heavy debt burden.

The company can also use the funds to buy other theaters, AMC said.

Bloomberg News first reported that Mudrick had left his equity position in AMC.

Become a smarter investor with CNBC Pro.
Get stock picks, analyst calls, exclusive interviews and access to CNBC TV.
Sign in to get started Try it for free today.