AMC stock went on a rollercoaster; the movie chain completed another share sale
On Thursday, AMC Entertainment‘s shares went on a rollercoaster before ending with lower after the company announced that it completed another share offering, raising $587.5 million in additional capital.
In the past three days, AMC has been taking advantage of increasing its stock prices. The company warned investors of its risks in the final announcement and said that it did not know how long the run would take.
A trader at Bright Trading LLC in Las Vegas, Dennis Dick, said that these prices would notlast forever, so why not use this opportunity to raise some cash.
Shares of the movie theater chain count more than 85% of its shareholder base as retail,also 3.3 million individual investors. These shares were down 19% at $51.35 at the close. On Wednesday, the share price nearly doubled to a record close of $62.56.
The wild ride is a reminder of the enormousgains that GameStop made earlier this year. It happened when traders bought the video game retailer while betting against funds having bearish positions.
Trading dynamics
On Thursday, AMC said in a statement that their current market prices reflect the market itself and their trading dynamics that are notrelated to their underlying business. The company added that it is also not associated with the industry or macro fundamentals, so they do not know how long these dynamics will last.
The company added that it completed an 11.56 million share before the market opened at an average price of approximately $50.86per share. Several Wall Street analysts said that AMC is overvalued, and many institutional investors expressed their opinion about this topic.
On Wednesday, the record price was 35times the level AMC traded at the end of last year and came a day after it issued 8.6million.
