AMC Entertainment Holdings Inc. experienced a 5% drop in shares following the completion of its latest equity offering, which raised around $350 million. The company sold approximately 48 million shares at an average price of $7.29 per share, according to a statement released by AMC on Monday.
This move is part of AMC’s ongoing efforts to reduce its debt burden, which currently stands at over $5 billion. By launching the equity offering on November 9th and repurchasing or exchanging debt for equity, AMC has managed to reduce its liabilities by $62.28 million.
“We are delighted to have successfully raised an additional $350 million in equity capital and reduced debt by over $62 million in just one month,” said AMC CEO Adam Aron in the statement. He emphasized that these actions reflect the company’s commitment to strengthening its balance sheet, improving liquidity, and systematically reducing debt levels.
AMC shares experienced a 5.4% decline on Tuesday. Overall, the stock has seen an 81.3% drop in 2023, while the S&P 500 index gained 20.9% during the same period.
With this equity offering, AMC has raised a total of $675 million since September 1st. In the calendar year 2023, the company has raised a total of $865 million in cash, as highlighted by Aron in a tweet.
“We acknowledge that some individuals express doubts about our strategies on social media—and sometimes very loudly,” Aron added. “However, they do not bear the responsibility of guiding a multi-billion-dollar enterprise through extremely challenging circumstances. They fundamentally fail to grasp the importance of robust cash reserves for AMC.”
Aron has consistently warned about the liquidity challenges faced by the movie-theater chain.
In its third-quarter results released last month, AMC—which was once the darling of meme stocks—reported positive net income for the second consecutive quarter. The company finished the quarter with $729.7 million in cash.
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