Shares of AMC Entertainment fell sharply Wednesday after the company disclosed a plan to sell more than 40 million common shares.
The movie theater operator’s stock fell more than 35% as the trading day approached the close.
The stock underwent a 1-for-10 reverse stock split on Aug. 24 and is now nearing its lowest point since January 2021.
AMC’s fall extends the entertainment company’s woes on Wall Street over the last year, slipping roughly 84% the last 12 months, 68% since Jan. 1 and now more than 73% the last quarter.
Adam Aron, AMC Entertainment CEO and board chairman (Patrick T. Fallon / AFP / File / Getty Images)
The equity agreement comes just days after AMC and musician Taylor Swift’s decision to show Swift's Eras Tour in theaters, which is expected to bring in more than $70 million in its opening weekend.
The equity agreement comes just days after AMC and musician Taylor Swift’s decision to show Swift's Eras Tour in theaters, which is expected to bring in more than $70 million in its opening weekend. (Kevin Winter / TAS23 / TAS Rights Management / File / Getty Images)
A filing with the Securities and Exchange Commission (SEC) shows that the company intends to use the net proceeds from the agreement to bolster liquidity, to repay, refinance, redeem or repurchase its existing indebtedness (including expenses, accrued interest and premium, if any) and for general corporate purposes.
Citigroup, Barclays, B. Riley Securities and Goldman Sachs will serve as sales agents on the deal. According to the SEC filing, each sales agent will receive compensation of up to 2.5% of the gross sales price.
The deal remains subject to the terms and conditions of the distribution agreement.