Shares of AMC Entertainment were trading higher Tuesday morning after the company sold shares in a private placement. AMC CEO Adam Aron defended the company's move on Twitter.
What Happened: A private placement worth $230.5 million saw AMC Entertainment Holdings AMC sell shares to hedge fund Mudrick Capital. Shares of AMC were sold at $27.12 each in the placement.
Aron shared a series of tweets that addressed the private placement and the company’s recent decision to sell shares in a $428-million funding round.
See also: How to Buy AMC Stock
“I believe one of the best things $AMC did in 2021 was to raise $428 million a few weeks ago, at $9.94 per share,” Aron said.
The CEO said the funding helped the company in the short term and strengthened it.
The 8.5 million AMC shares sold represent less than 1.7% of all outstanding shares and a small portion of the company’s typical trading volume, he said.
Related Link: Is Jim Cramer Helping Fuel The AMC Entertainment Stock Rally? CEO Thanks The CNBC Host
The funding raised by AMC is expected to be used to acquire additional theaters, which could create immediate value for shareholders, Aron said.
“We are seeing some terrific opportunities to pick up important theaters from other faltering chains,” the CEO said.
“First in our sights are the strongest Arclight/Pacific theatres that will not re-open due to pandemic pressure. No one is out of the woods yet, but we like AMC’s improved liquidity, the increases of vaccinated people and the imminent release of new blockbuster movies.”
The move by AMC is not “mindless dilution” and will help the company grow, he said.
“Watch out naysayers, $AMC is going to play on offense again.”
Aron referenced the role that retail investors are playing in AMC’s share price surge, saying the funding can help grow the company or “to many of you on Twitter, to grow YOUR company.”
In our view, this is not mindless dilution, but rather this is very smart raising of cash so that we can grow this company... to many of you on Twitter, to grow YOUR company. Watch out naysayers, $AMC is going to play on offense again. Here we come! {5 of 5}
— Adam Aron (@CEOAdam) June 1, 2021
AMC Price Action: Shares of AMC Entertainment were trading 16.21% higher at $30.33 at last check Tuesday.
Photo courtesy of AMC Entertainment.
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