Take the popcorn! AMC rises as meme army keeps line Business and Economic News

AMC Entertainment Holdings Inc. it’s actually based on that meme-stock phenomenon.

On Wednesday, the film chain announced that it will reward low-season investors who have been instrumental in this year’s rally of 1,400% participation that has not kept up with AMC’s logic, including special screenings and free popcorn. AMC will take advantage of these meteorological gains and one day reach $ 230 million directly to one of its major creditors, Mudrick Capital Management, to earn and consolidate its finances.

While Mudrick called his entire stake a tidy profit and called the company massively overvalued, Reddit retail people didn’t like it. Encouraged by the public embrace of the AMC, shares rose to 93% on Wednesday, a record for the day, before trading on the New York Stock Exchange was suspended. Profits boosted AMC’s market value by approximately $ 28 billion, surpassing GameStop.

“Many of our investors have shown support and trust in the AMC … After all, these people own the AMC, and I work for them,” Adam Aron, AMC’s CEO, said in a statement Wednesday.

According to the document, more than 3.2 million people had a stake in AMC as of March 11, accounting for more than 80% of the investor base. Earlier last month, Aaron spoke directly with many of these new investors at AMC’s quarterly conference call, cheering them on with their passion, commitment and enthusiasm.

The skeptical stock market analyst then asked them to pay attention to these investors – “read what these people are writing,” he told them.

Few other top executives in America, if any, have welcomed the new impact that a retail set like Aaron has had. Again, few companies owe it to them either.

A few months ago, AMC was on the verge of bankruptcy. That’s what an army of traders of the day, who don’t claim the value of the old school agreements with the companies, gathered around their shares. Using online platforms like WallStreetBets, these short-time marketers came together by taking hashtags like #AMCSTRONG and #AMCSqueeze on Twitter.

Along with GameStop, it has become a poster for meme-stock mania that has captivated AMC markets and confused Wall Street professionals.

Current trading places the company’s market capitalization at more than $ 18 billion, even though the chain has more than $ 5 billion in debt and a negative shareholding, which is negative with more than $ 5 a share.

“It’s clear that the bases don’t support ordinary stock levels (which makes sense for people on Reddit),” Mark Levin said in a note to Asterisk Advisors.

Buy and sell

Some expert investors like Mudrick saw this as a unique opportunity to make a quick profit.

Raising money from a single holder through the sale of equity is quite rare in U.S. markets. The fact that the holder bought it after the stock was overturned is hardly heard. In this case, Mudrick’s role in AMC’s offering bears a striking resemblance to the public offering that shareholders buy with the specific intention of reselling it to investors.

A Mudrick representative declined to comment and AMC, in Leawood, Kansas, did not respond to requests for comment.

In a statement announcing the offer, Aaron said the deal with Mudrick “will allow us to be aggressive in our search for the most valuable active theaters, as well as opportunities for other strategic investments in our business and to unleash opportunities.”