US Markets
Tuesday, May 14th, 2024 2:12 pm EDT
Key Points
- Equity Capital Raise: AMC Entertainment raised approximately $250 million through the sale of 72.5 million shares in an at-the-market equity offering, selling at an average price of $3.45 per share.
- Stock Surge and Volatility: Following the equity sale announcement, AMC shares soared 94% on Tuesday, experiencing trading pauses due to volatility. The stock opened at $3.52 on Monday, peaked at $5.88, and closed at $5.19, marking a significant increase from the previous week.
- Roaring Kitty’s Influence: The meme stock rally was reignited by the return of “Roaring Kitty” (Keith Gill), whose social media post sparked a buying frenzy among amateur traders, also causing a significant surge in GameStop shares by 74% on Monday and over 100% early Tuesday.
AMC Entertainment successfully raised approximately $250 million in new equity capital, capitalizing on the renewed meme stock frenzy spurred by the return of “Roaring Kitty.” The movie theater operator sold 72.5 million shares through an at-the-market equity offering initiated on March 28, at an average price of $3.45 per share before accounting for commissions and fees. This surge in trading activity saw AMC shares soar 94% on Tuesday, following an impressive 78% rise on Monday. The stock experienced significant volatility, even being paused at one point due to the rapid price increases.
On Monday, AMC shares opened at $3.52, marking a 21% increase from the previous Friday. This rise likely encouraged AMC to finalize its equity sale at the elevated prices observed during the trading session. Throughout the day, the stock more than doubled, reaching an intraday peak of $5.88 before closing at $5.19.
The resurgence of meme stock trading was triggered by a social media post from Keith Gill, known as “Roaring Kitty,” who had inspired the 2021 meme stock mania. Gill’s cryptic post—a meme of a gamer leaning forward in a chair—was enough to incite a buying frenzy among amateur traders. This activity resulted in GameStop shares surging by 74% on Monday and more than doubling early Tuesday.
Citigroup, Barclays, B. Riley Securities, and Goldman Sachs acted as sales agents for AMC’s equity offering, facilitating the company’s strategic move to raise capital amidst the volatile trading environment. The events underscored the continued influence of social media and retail investor enthusiasm in driving stock market activity, particularly for companies like AMC and GameStop that have previously been at the center of meme stock movements.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/05/14/amc-raises-250-million-in-stock-sale-during-mondays-meme-rally.html
