AMC stock jumps after company raises $325.5 million from selling shares
AMC (AMC) stock jumped as much as 9% in early trading on Thursday after the theater chain announced it received approximately $325.5 million of new equity capital through the sale of 40 million shares.
The company said Wednesday the completion of the equity offering, which initially led to volatile stock swings amid investor concerns over share dilution, "significantly boosts AMC's cash reserves," in addition to "addressing current liquidity concerns" as the company works to strengthen its balance sheet after the pandemic hammered its business.
“The successful completion of this equity offering marks another significant milestone for AMC," President and CEO Adam Aron said in a statement. "Raising more than $325 million in gross proceeds has bolstered our ability to survive and then thrive."
"As we navigate the recovery phase of our industry, this infusion of capital provides us with flexibility to assist us in navigating the waters ahead and continue delivering the magic of movies to our guests," he continued.
The news comes as AMC has enjoyed lofty box office sales following the blockbuster debuts of "Barbie" and "Oppenheimer" this past summer — an encouraging sign of a theatrical bounce-back.
The opening weekend of the two films, which quickly became known as "Barbenheimer," led to AMC's best single-day performance since before the pandemic.
In its most recent quarter reported on August 8, AMC beat Wall Street expectations on both the top and bottom lines after reporting revenue of $1.35 billion and adjusted earnings of $0 a share. It was the first time the company did not report an adjusted loss per share since the fourth quarter of 2019.
Still, revenue lagged pre-pandemic results by about $150 million compared to Q2 2019. Attendance levels also dropped compared to the same time period, down 30%.
The ongoing Hollywood strikes will likely add to challenges after Warner Bros.' (WBD) delayed its "Dune" sequel to March 2024 after originally scheduling the film for November 2023.
But the chain does have one theatrical event to look forward to — Taylor Swift's Eras Tour movie.
The pop star confirmed last month a film version of her show will debut in theaters, beginning on October 13. AMC called it the "theatrical event of the Millennium" as other theater giants like Imax (IMAX) and Cinemark (CNK) are also expected to see a boost.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on Twitter @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
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