AMC Theaters, while perhaps not getting all of the attention that GameStop has gotten, has been another of the heavily shorted stocks to receive a healthy most from social media-driven retail investors this week, and the company looks to be striving to move that momentum forward.
The theater chain had been struggling on account of the COVID pandemic, and the economic impact of governmental regulation on where and when people gather. Some movie houses adapted well, allowing only “private groups” to rent theaters for screenings, and working with a barebones staff.
Now, however, after Reddit investors noticed that AMC had been written off by big hedge funds and began pumping millions into their stock, the theater chain has a new lease on life it seems.
On Wednesday, AMC said it raised an additional $304.8 million by selling shares this week, cashing in on an unprecedented social media-driven rally powered by amateur traders taking on hedge funds that had shorted its shares.
On Thursday, it said Silver Lake and other creditors decided to convert debt holdings to equity in a transaction expected to reduce AMC’s obligations by $600 million.
As they say in the biz: The show must go on.
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