Why AMC Shares Spiked 40% Today

AMC Entertainment Holdings Inc AMC shares rallied nearly 40% today.

What Happened: The stock was traded with heavy volumes of up to 248 million shares. The average volume for AMC shares is nearly 29.7 million. 

The movie theater company’s stock soared after it said it raised $100 million through first-lien, secured notes due 2026, as per a filing with the U.S. Securities and Exchange Commission. 

The Kansas-headquartered company said that the notes would bear an interest of 15% per year. 

AMC shares have fallen 57.97% on a year-over-year basis. 

Why It Matters: The interest for the first three interest periods after the issue date may be paid in payment-in-kind at 17% per year, as per the filing. 

AMC can redeem 35% of the aggregate principal amount of the notes using net proceeds from certain equity offerings before Jan. 15, 2023. 

This month, the company’s CEO Adam Aron said that AMC had raised $200 million in funding but it was still $550 million short of its $750 million target.

The COVID-19 pandemic has upended AMC’s operations and forced the company into a cash crunch.

Price Action: AMC shares closed 31.9% higher at $3.06 on Tuesday and gained 7.84% to $3.30 in the after-hours session.

See Also: AMC Entertainment Bankruptcy Is 'Likely,' Analyst Says