Shares of AMC Entertainment (AMC 8.85%) soared as much as 178% from their closing price on Friday, May 28 by Wednesday morning. Even after pulling back sharply on Thursday and Friday, the popular meme stock finished the week up a stunning 83%.
AMC embraced its growing army of fans on Wednesday with the launch of AMC Investor Connect, a new program designed to reward its shareholders with special offers, such as a free tub of popcorn when they return to an AMC theater for the first time this summer. The move helped to further ingratiate the company with its most passionate supporters. Retail traders pumped hundreds of millions into its stock in the days that followed, helping to fuel a steep rally in its share price.
AMC wasted little time to cash in on the rally. The company sold 11.6 million shares to investors for approximately $587.4 million on Thursday. Management said the funds would help AMC pay down debt and pursue theater purchases. The stock gave back some of its earlier gains on the news, as investors grimaced at the resulting dilution and the risks involved with a potential acquisition.
CEO Adam Aron wants to raise even more cash. On Thursday, he attended a live chat on YouTube and asked shareholders to authorize the sale of an additional 25 million shares.
"If you arm us with the tool -- meaning stock as the tool -- to go find value-creating opportunities for AMC shareholders, we can do that," Aron said. "If we are not armed with this tool, then you're tying our hands behind our back, and you'll make it just that much harder for us to land some of these attractive opportunities that could benefit us all."
Yet even as Aron was trying to convince shareholders to buy into his plan, company insiders were selling their stock. Two AMC board members and four executives sold a combined $8 million in the theater chain's shares on Thursday, as reported by Bloomberg.