AMC has been on a roll for almost a month now despite facing bankruptcy.
AMC Entertainment Holdings (AMC) has almost rattled the shadows of bankruptcy after obtaining $917 million in fresh capital. AMC stock has been on a continuous bull run for almost a month now.
The short-traders has massively triggered the stock price in the recent trading sessions. Many individual traders have made stock purchases on Reddit in an attempt to pressure short-sellers—thus pushing AMC to skyrocket.
What’s Next?
The big news for AMC Entertainment (AMC) is that it has secured $917 million in fresh capital to avoid bankruptcy. The company has enough funds now to keep up with its financial needs—deep into 2021.
The company also revealed that it has raised commitment letters to receive $917 million of new equity and debt capital since December 14, 2020. AMC intends to use $506 million of the new capital to be raised from the issuance of 164.7 million new common shares, in addition to the $100 million of first-lien debt.
Mover, AMC has also obtained commitment letters worth $411 million of incremental debt capital through mid-2023. The CEO of AMC, Adam Aron highlighted that they collected $1 billion cash between April and November last year via debt and equity raises, with a handy amount assets sale as well. This means that the company is off and running as the fear of bankruptcy remains no more.
With the recent capital funding, the company expects business operations to be back working with full potential. Furthermore, the company is in talks with theatre landlords about the amounts and timing of owed theatre lease payments.
Things are shaping up well for AMC and will get better once the business activities resume to their full capacity—with COVID restrictions lowering down.
The recent push in the stock price is also supported by the heavy trading volume of short-sellers. The stock is in a random bull run that is skyrocketing shares price. As we write during pre-market, shares of AMC have soared 143.93% to $12.05. This jump is quite extravagant as the stock is up from its prior close of $4.96.
Conclusion
The bankruptcy threat is over and the capital funding solidifies AMC’s liquidity and financial position. Though the stock price is supported and pumped by the Reddit battle of short-sellers pressured to buy the shares in recent trading sessions. Currently, AMC Entertainment’s stock is trading at more than doubled price—in a gap of a single trading day. So, it will pull back to its real price once the Reddit bulls go away.
