AMC, the world’s biggest movie theater operator, saw its stock rise more than 120 percent to a new high over $70 on Wednesday before dipping slightly. Due to the stock’s volatility, trading was halted twice. The stock finished at $62.55 on Wednesday, up 95% on the day.
The prominent WallStreetBets Reddit community has recently lifted the stock in an attempt to punish short sellers. AMC (AMC) said on Wednesday that it will use an effort named “AMC Investor Connect” to reach out to its new supporters.
AMC’s Support for Retail Investors
“AMC Investor Connect,” according to the corporation, is a mechanism for AMC to communicate directly with its “exceptional community of energetic and passionate individual shareholders.” Over the previous several months, the theater chain’s “retail shareholder base has grown over 3 million shareholders,” according to the company.
Retail supporters will also get exclusive discounts and invitations to screenings.
The positive news on Wall Street came only one day after AMC announced a $230.5 million fundraising by selling 8.5 million shares to Mudrick Capital Management.
After a difficult year in the business, the theater chain is attempting to return to normal. The coronavirus epidemic affected cinemas particularly hard, resulting in the closure of cinemas and the postponement of major film releases. AMC, on the other hand, has recently seen a turnaround of fortunes, due in large part to Reddit’s army of investors.
However, the recovery has been aided by movies — as well as consumers — returning to cinemas in recent months, as seen by last weekend’s strong box office results.
What is AMC?
AMC is an American movie theater chain with headquarters in Leawood, Kansas, and is the world’s biggest. AMC Theatres, which was founded in 1920, has the greatest market share in the United States, ahead of Regal and Cinemark Theatres.
It became the world’s biggest movie theater network after purchasing Odeon Cinemas, UCI Cinemas, and Carmike Cinemas in 2016.
In Europe, it has 2,866 screens in 358 theaters, whereas, in the United States, it has 7,967 screens in 620 theaters.
The firm is traded on the New York Stock Exchange, and Wanda Group, a Chinese conglomerate, had a controlling share in it from 2012 to 2018. AMC received a $600 million investment from private equity company Silver Lake Partners in September 2018, although the voting power of AMC shares is structured in such a manner that Wanda Group still controls the majority of the board of directors.
Due to additional funding by AMC and Silver Lake converting its $600 million debt holding to stock following a short squeeze, Wanda’s shareholding was further diluted in January 2021, despite financial downturns induced by the COVID-19 epidemic. Wanda changed its Class B shares to Class A shares in early February 2021, decreasing its voting power.