“That allowed the company to get some cash at a higher price than they would have two weeks ago.” He adds, “It gave AMC added liquidity it wouldn’t have otherwise.” “They were able to benefit from the stock going higher,” Handler says. In return, AMC will issue 44,422,860 Class A shares to Silver Lake, resulting in a $284 million boost.

According to a securities filing, the move will lighten AMC’s debt load by $600 million. AMC said on Thursday that Silver Lake opted to convert the $600 million bond it owns into equity. Since the stock is currently trading well above pre-pandemic levels, AMC and investor Silver Lake, a private equity firm, have used the tumult to their advantage. They had too much debt on the balance sheet. “AMC was the only exhibitor at risk of potential bankruptcy. ‘There were a lot of people betting against the company being successful,” Wold says. However, there was an injection of long-term confidence earlier in the week as AMC announced it secured $917 million in financing, enough to get the struggling cinema chain through the ongoing coronavirus crisis.

Riley & Co., who also covers AMC Entertainment. It’s just a matter of when.”ĪMC, which was at risk of bankruptcy even before the pandemic, became a target because amateur traders online were looking to influence stocks that were heavily short-sighted, says Eric Wold, an analyst with B. “History would suggest over the long term, true financials and historical valuations will matter. So is this a short-term phenomenon or something sustainable? “Right now, the company’s stock price has been decoupled from financial reality,” he says. “Robinhood investors are a bit of a wildcard,” says Eric Handler, a research analyst at MKM Partners who covers AMC Entertainment.

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