Sit back and enjoy the show! AMC Exceeds $14 Billion Market Value | Financial market news

Shares of the American movie company are up more than 1,250% year-to-date, fueled by retail investors and Reddit users.

Through Bloomberg

Passionate investors at AMC Entertainment Holdings Inc. have boosted the company’s market value to $14 billion for the first time.

Shares extended an intraday rally to climb 49%, the most since late January, at 3:15 p.m. in New York, as the value of the Leawood, Kansas-based company hit a record high. Volume also surged, with more than 600 million shares traded, more than four times the average of the past five sessions.

AMC’s revival has been fueled by individual investors eager to save the movie industry after raising more than $1 billion in funding to stave off bankruptcy in recent months. The title is up more than 1250% since the start of the year.

CEO Adam Aron embraced the Reddit-powered rally and spoke to new retail investors on conference calls. The stock has more than doubled since AMC released its quarterly results on May 6, adding more than $10 billion in value. Thursday’s step stands out from a market value low of $216.8 million that was reached in April 2020.

As Chad Beynon, an analyst at Macquarie Securities, waits for AMC to continue shedding debt and lease obligations before becoming more constructive on stocks, he acknowledged the mania individual investors can create.

“The Reddit crowd is strong, volumes have been off the charts lately, so there’s clearly demand that wasn’t there pre-Covid,” he said over the phone. The company’s ability to raise more than $10 per share earlier in the month “marked the first time the company was able to benefit financially from the Reddit rally,” he said.

The money AMC has raised through the sale of hundreds of millions of additional shares is a key driver of the massive increase in market value despite the fact that the stock is actually trading down 20% from more than 490 million shares of AMC are currently available for trading, according to data compiled by Bloomberg, nearly ten times the 52 million shares outstanding at the start of last year. .

More capital

AMC-linked debt has rallied alongside stocks, setting new highs in recent days. The company’s bonds, which were trading at a low of 5 cents in November, are slowly approaching parity, according to trading data from Trace. This debt carries a high coupon of 12% for notes maturing in 2026.

AMC bonds were among the best performers in the U.S. high-yield market on Thursday, extending gains from the start of the week.

The company has previously said it may seek more funding, and some investors have suggested it sell more shares to pay off or seek to refinance its more than $10 billion in debt.

The theater chain “will carefully consider raising additional capital in whatever form we deem most attractive” and will focus on deleveraging, Aron said on a call to discuss fourth-quarter results in March.

The company’s latest resurgence in the hands of individual investors has pushed the market value to more than double its April 2017 peak of $4.17 billion before trading this year. Simply put, AMC has consistently added more than $1 billion in each of the past three sessions, more than double its value at the start of the year.

The movie company’s ability to post strong box office numbers when it reopens in key markets like New York and California will be important, B. Riley Securities analyst Eric Wold said by phone. Wold downgraded the stock to buy neutral on Wednesday citing valuation concerns.

About Keith Tatum

Check Also

Cash Boost for T Levels

Employers will be able to claim a £1,000 cash increase for every T-level student they …