AMC Stock Is Tumbling Wednesday: What's Going On?

AMC Entertainment Holdings Inc AMC shares are falling Wednesday after the company entered into an equity distribution agreement to sell shares through an at-the-market offering.

What Happened: In a new regulatory filing, AMC said it entered into an agreement with Citigroup, Barclays, Riley Securities and Goldman Sachs to act as sales agents to sell up to 40 million shares of common stock from time to time in an offering program. 

The company intends to use net proceeds from the sale to "bolster liquidity, to repay, refinance, redeem or repurchase its existing indebtedness (including expenses, accrued interest and premium, if any) and for general corporate purposes."

Each sales agent will receive up to 2.5% of the gross sales price of the common stock as compensation and any expenses will be reimbursed by AMC. 

AMC is not obligated to sell any stock under the equity distribution agreement and may suspend the agreement at any time.  

The news comes about a week after AMC implemented a 10-to-1 reverse stock split. The movie theater chain also converted its preferred equity shares, called APE units, into common stock on Friday, just one year after the APE units began trading. 

From Last Week: AMC's All-Time Lows May Go Lower As Silver Screens Fade To Black

AMC Price Action: AMC shares were down 12.5% at $11.94 at the time of publication, according to Benzinga Pro.

Photo: Dave Dugdale from Flickr.