The AMC Empire 25 near Times Square is open as New York City’s cinemas reopen for the first time in a year following the coronavirus shutdown, on March 5, 2021.
Angela Weiss | AFP | Getty Images
Shares of AMC Entertainment surged again on Tuesday after the theater chain sold more than 8 million shares to an investment firm, the latest in a series of capital raises for the struggling company turned meme stock.
AMC said in a securities filing that it raised $230.5 million through a stock sale to Mudrick Capital Management. The company said it would use the funds for potential acquisitions, upgrading its theaters and deleveraging its balance sheet.
Shares were up 7% in premarket trading.
AMC’s business was effectively halted during the pandemic, with movie theaters shut in most of the country for months and major studios delaying releases during the pandemic. However, the stock became a favorite of traders on Reddit and has seen wild swings in recent months.
The shares doubled last week on incredibly high volume as the speculative activity by retail traders driven by the message board ramped back up once again.
The company has taken advantage of those price surges by selling additional shares to raise cash. The stock is up more than 1,000% year to date.
Tuesday’s move also follows a bounce-back weekend for movie theaters in the U.S., with “A Quiet Place Part II” setting the highest opening weekend sales since the start of the pandemic.