AMC Stock Plunges After Theater Chain Announces Stock Sale to Raise $250 Million

AMC Entertainment (AMC) shares tumbled over 14% in intraday trading Thursday as the theater chain operator announced another stock sale to generate cash.

AMC wrote in a regulatory filing Thursday that it had entered into an equity distribution agreement with four financial institutions to sell shares of Class A common stock “from time to time” through an at-the-market offering, to raise a total of $250 million.

AMC said the money was needed in part because last year’s strikes by Hollywood writers and actors negatively impacted first-quarter box office receipts.  

The company noted the funds would be used 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.”

In November, shares sank when the company announced it was putting as much as $350 million of its Class A shares up for sale. That came just two months after it sold 40 million shares, bringing in $325 million. A month prior to that, AMC initiated a 1-for-10 reverse stock split to raise capital.

AMC shares sank more than 14% to $3.70 as of 11:45 a.m. ET. They hit an all-time low of $3.59 last month.