AMC Entertainment (NYSE:AMC) stock is taking a beating on Thursday on news that the theater company wants to offer more shares.
AMC Entertainment CEO Adam Aron brought up the idea during an interview on CNBC’s Squawk Box while speaking with Jim Cramer. The theater chain wants to raise the money to help it cover its debt.
Here’s what Aron said during the interview.
“Dilution is something we care about, but I will say we are formally asking approval from our shareholders to authorize another 500 million new shares that the company could issue if it wishes. There are a lot of benefits to our shareholders of having more authorized shares out on the market. We’ll be sensitive to dilution issues, but at the same time there’s an opportunity to bolster our cash reserves and there’s an opportunity to buy back debt at a discount or pay deferred theatre rents. There are a lot of good reasons for shareholders to give us the authority.”
If the stock movement today is any indication, shareholders of AMC aren’t happy about the idea of more shares entering the market. As of Thursday afternoon, shares in AMC stock were down 4.1%. It’s worth noting that the stock is still up 386.8% since the start of the year.
AMC Entertainment was struggling during the novel coronavirus pandemic with fears it would go bankrupt. However, it was saved by an unexpected ally, Reddit traders. These traders picked up shares in stocks targeted by short-sellers, which sent the shares prices soaring. Since then, AMC stock has continued to be one of Reddit’s favorites.
Reddit has also an interest in a few other stocks as well.
Cheif among these is GameStop (NYSE:GME), which kicked off the meme stock boom. Others that members of the WallStreetBets subreddit have a fondness for include BlackBerry (NYSE:BB), and Castor Maritime (NASDAQ:CTRM). Investors can learn more about these Reddit stocks at the links below.
More Reddit Stocks to Watch
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.
View more information: https://investorplace.com/2021/04/amc-stock-alert-the-news-taking-a-bite-out-of-reddit-favorite-amc-entertainment-today/