Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

AMC Entertainment Tapping Equities Market for Cash With 200 Million Share Offering

By Rich Duprey - Dec 3, 2020 at 12:29PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The movie theater owner is scrambling to stay afloat during the pandemic.

Having previously warned investors it could run out of money by the end of the year, AMC Entertainment Holdings ( AMC 9.10% ) says it is looking to raise over $860 million by filing with the SEC its plan to sell up to 200 million shares.

The world's largest movie theater owner has faced a cash crunch ever since cinemas were shut down earlier this year due to the pandemic. The problem was compounded as movie studios also closed and most theatrical debuts were postponed until 2021. Consumers have stayed away from theaters since.

Moviegoers cringing in their seats

Image source: Getty Images.

AMC and rival Cinemark have chosen to tough it out and keep their theaters open, offering moviegoers a number of classic titles to see. AMC is also renting out its theaters to large groups to bring people in.

It plans to use the proceeds from the offering for general corporate purposes, which may include the repayment or refinancing of existing outstanding debt, as well as for working capital, capital expenditures, or other investments.

Keeping the ghost light burning

This isn't AMC's first dip in the well of equity offers. Last month the theater owner filed to raise $70 million by issuing 20 million shares. Before that, in both July and October, it revealed equity distribution agreements to place 15 million shares into the market.

At the end of the third quarter, AMC Entertainment had over $5.8 billion worth of debt on its balance sheet.

 
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

AMC Entertainment Holdings, Inc. Stock Quote
AMC Entertainment Holdings, Inc.
AMC
$31.41 (9.10%) $2.62
Cinemark Holdings, Inc. Stock Quote
Cinemark Holdings, Inc.
CNK
$17.26 (3.92%) $0.65

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
633%
 
S&P 500 Returns
140%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/07/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.