AMC may sell up to 11.6 million of its shares with a trading phenomenon pushing stock in the movie theater chain up almost 2,000% this year, and 140% just this week.
AMC, which operates eight movie theaters in the Chattanooga area, is emerging from pandemic lockdowns that threatened the very existence of the company. Industry analysts have yet to fully explain, or even comprehend, the extreme enthusiasm for its stock that being driven by large numbers of online traders who seem to disregard the rough path the company faces in its recovery.
AMC acknowledged that phenomenon Thursday in a filing with the U.S. Securities and Exchange Commission when it announced the potential sale of shares “from time to time.”
“We believe that the recent volatility and our current market prices reflect market and trading dynamics unrelated to our underlying business, or macro or industry fundamentals, and we do not know how long these dynamics will last,” AMC said in the filing. “Under the circumstances, we caution you against investing in our Class A common stock, unless you are prepared to incur the risk of losing all or a substantial portion of your investment.”
The announcement in a regulatory filing on Thursday comes just two days after the company said it was raising $230.5 million through an 8.5 million share sale, and a day after it offered its new investors free screenings, discounts and a free large popcorn.