The agreed deal sees Mudrick Capital acquire 8.5 million shares of common stock at USD 27.12 a share, which is remarkable considering the fact that stock price had dropped to USD 2 at the start of 2021 and was on the verge of bankruptcy amidst the pandemic.
During a conference, Chief Executive Officer and President Adam Aron said, “With this agreement with Mudrick Capital, we have raised funds that will allow us to be aggressive in going after the most valuable theatre assets, as well as to make other strategic investments in our business and to pursue deleveraging opportunities”.
The Company plans on using its raised capital for acquisition opportunities and/or investments to grow AMC revenues in existing theatres.
Aron also tweeted that the reason for this dilution was to grow the Company. He wrote, “In our view, this is not mindless dilution, but rather this is very smart raising of cash so that we can grow this company... to many of you on Twitter, to grow YOUR company. Watch out naysayers, $AMC is going to play on offense again. Here we come!”
The stock price is now up more than 450% compared to last year. The extreme price fluctuations were fueled largely by a frenzy of retail investors pumping up the stock price under the subreddit WallStreetBets throughout the past year, alongside other meme stocks like GME and BB.