AMC's Wild Ride Continues, Stock Sinks After Record High The world's biggest theater chain says it's unsure how long the volatility will last.
By Euni Han •
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Just a day after soaring 120% to a new high, AMC stock dropped 17% in early Thursday trading after the company announced plans to sell up to 11.6 million shares, Business Insider reports.
Related: AMC Continues to Ride Social Media Hype as Share Prices Skyrocket to 50% Increase
AMC has reached an agreement with investment bank B. Riley Securities and Citigroup Global Markets to act as selling agents, according to an SEC filing. AMC plans to use net proceeds from the sales for general corporate use which can include capital expenditures or repaying or refinancing debt. The company also warned investors about possible losses:
"Under the circumstances, we caution you against investing in our Class A common stock, unless you are prepared to incur the risk of losing all or a substantial portion of your investment."
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On Wednesday, however, AMC shares closed 95% higher on retail trading from Twitter and Reddit's WallStreetBets. This is despite an 8.5 million share dump from hedge fund Mudrick Capital, which bought and sold shares in the same day, according to Bloomberg.
AMC was one of the names that made headlines in January when retail traders on Reddit piled into stocks like GameStop to short squeeze hedge funds and cause them steep losses. And AMC says the rollercoaster ride may not be over just yet:
"We believe that the recent volatility and our current market prices reflect market and trading dynamics unrelated to our underlying business, or macro or industry fundamentals, and we do not know how long these dynamics will last."
AMC also recently launched a website, Investor Connect, in an effort to reach those online investors who have boosted its stock --- offering a free large popcorn and invitation to special screenings for those who sign up.
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