AMC Entertainment Holdings Inc. (AMC (AMC)) said Thursday it has completed its previously announced $150 million at-the-market equity offering, raising the full amount by selling approximately 105.3 million shares. The company plans to use the proceeds to strengthen its cash position and balance sheet, giving it more financial flexibility as the theatrical industry continues its recovery.
The timing is notable. AMC noted that May was a record month at the box office, and over the past 11 weeks, six films have generated domestic opening weekends of more than $75 million. That's a far cry from the pandemic-era doldrums, and it suggests that moviegoing is back in a big way.
Chairman and CEO Adam Aron said the offering strengthens AMC's balance sheet, boosts cash reserves, and supports its long-term strategic objectives, including increasing Adjusted EBITDA, reducing leverage, enhancing the guest experience, and creating shareholder value. In other words, the company is using the equity raise to buy itself some breathing room and invest in the business.
The announcement comes a day after AMC shares surged amid retail trading activity sparked by an unverified social media post claiming that Keith Gill's—or "Roaring Kitty's"—brother said the stock could rise above $10. That kind of meme-stock energy is nothing new for AMC, which has become a favorite of retail traders looking for a squeeze.
The rally also followed strong operating data released earlier this month. AMC reported that 25.5 million guests attended its theaters globally in May, the company's strongest May attendance since 2019. That's a clear sign that the recovery is real, even if the stock's valuation remains a topic of debate.
Speaking of debate, analysts are all over the place. The stock carries a Hold rating with an average price forecast of $1.68, well below Thursday's trading price. Recent moves include Citigroup maintaining a Sell rating but raising its forecast to $1.20 on May 7, Benchmark upgrading to Buy with a $2.50 forecast on May 6, and Macquarie staying Neutral while lowering its forecast to $1.50 on Feb. 26. So while the business is improving, Wall Street isn't exactly pounding the table.
As of Thursday's publication, AMC shares were up 6.97% at $2.23, according to market data. That's a nice pop, but it's still a long way from the meme-stock highs of 2021. For now, the company is focused on using its new cash to navigate the recovery and prove that the theater business has a future beyond the headlines.
