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AMC Entertainment (NYSE:AMC) has staged quite a comeback this week, with its shares up by about 13%. This move was aided by the movie theater chain announcing that it had successfully completed its at-the-market offering by raising $325.5 million in equity capital through the sale of 40 million shares. Each share was priced at approximately $8.14.
“The successful completion of this equity offering marks another significant milestone for AMC. Raising more than $325 million in gross proceeds has bolstered our ability to survive and then thrive. As we navigate the recovery phase of our industry, this infusion of capital provides us with flexibility to assist us in navigating the waters ahead and continue delivering the magic of movies to our guests,” said CEO Adam Aron.
After the announcement was made, Aron took to X, the platform formerly known as Twitter, to address the challenges highlighted by shareholders.
AMC Stock: CEO Adam Aron Releases X Statement
Aron starts off his message by explaining that he has received over 5,000 comments, both positive and negative, regarding his recent posts on X. These posts cover AMC’s equity raise, the Sept. 15 release of Dumb Money, and Taylor Swift’s upcoming movie. Granted, the negative comments were likely attributed to AMC’s equity raise, which diluted shareholders while at the same time provided AMC with much-needed capital.
Next, the CEO explains why he is qualified to lead AMC, given his track record of running five companies since 1993. He also believes that the difficulties of the current macroeconomic environment are comparable “to the 1940’s when the entire world was consumed by war.”
Aron sympathizes with angry shareholders concerned about dilution but ultimately believes that raising equity was the right move for AMC. In a previous post, he noted that AMC ran the risk of running out of money by 2024 or 2025 if it was unable to raise equity capital. This risk was exasperated by the effects of the ongoing writers’ and actors’ strikes.
Now, with more equity, AMC has a better-positioned balance sheet and more cash reserves. This should allow the company to capitalize on appealing opportunities as long as capital is allocated efficiently.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the biedexmarkets.com.com Publishing Guidelines.