AMC Entertainment recently raised around $250 million through a new equity capital offering. This move came amidst the revival of the meme stock craze, which was triggered by the reappearance of “Roaring Kitty.” The movie theater operator decided to sell 72.5 million shares in an at-the-market equity offering that began on March 28. Ultimately, AMC managed to sell these shares at an average price of $3.45 per share, excluding commissions and fees.
Following the news of the equity sale, AMC’s stock price surged by 94% on Tuesday, leading to a temporary halt in trading due to heightened volatility. The stock had opened at $3.52 on Monday, exhibiting a 21% increase from the previous closing price. This significant spike in AMC’s stock price likely encouraged the company to capitalize on these elevated prices and complete the equity sale accordingly. As trading continued on Monday, AMC’s stock price more than doubled, reaching an intraday high of $5.88 before closing at $5.19, up by over 78%.
Roaring Kitty, the individual credited with igniting the meme stock frenzy in 2021, made a comeback online with a mysterious image featuring a man in a chair leaning forward. This seemingly cryptic post was sufficient to reignite enthusiasm among retail investors, leading to a surge in AMC’s stock price. In parallel, GameStop, another meme stock favorite, witnessed a 74% increase in its stock price on Monday, accompanied by multiple trading halts. This trend continued into Tuesday, with GameStop’s stock price soaring over 100%.
To facilitate the equity offering, AMC Entertainment enlisted the services of reputable sales agents, including Citigroup, Barclays, B. Riley Securities, and Goldman Sachs. These financial institutions played a crucial role in executing the sale of AMC’s shares to interested investors, contributing to the success of the company’s capital-raising endeavor.
AMC Entertainment’s strategic decision to capitalize on the current meme stock craze by conducting an equity offering has proven to be highly lucrative. The overwhelming market response, fueled by the involvement of key players like Roaring Kitty and reputable sales agents, underscores the ongoing impact of retail investors and social media on stock market dynamics. As meme stocks continue to capture the attention of the investing community, companies like AMC are leveraging these trends to secure additional funding and drive shareholder value.