AMC Gets $250 Million by Giving Mudrick’s Fund a Quick Cameo

Bloomberg2021-06-02

The investment firm helps the cinema chain float more shares Quick sale motivated by concern that AMC is overvalued Even before Reddit day traders pushedAMC Entertainment Holdings Inc.’s stock up 1,...

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Comments

hwhw123
2021-06-02
hwhw123
Like and comment please ??
- hwhw123:
  good day to you. [鬼脸] [龇牙] [得意]
- yl2021:
  good
FrickL
2021-06-02
FrickL
?
aalyn
2021-06-02
aalyn
like and comment
jxboi
2021-06-02
jxboi
AMC to the moon
halforc
2021-06-02
halforc
HODL
- daggerw:
  huat ????
2MDB
2021-06-02
2MDB
Like and comment
- Hi12345:
  Like and comment
- 2MDB:
  Like and comment
- aalyn:
  nice

Leave a comment

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Meanwhile, his firm was telling clients it was selling because AMC was massively overvalued. AMCjumped18% in post-market trading.\nThe stock sale is the latest head-scratching twist in the saga of a theater chain that was on the verge of bankruptcy just months ago, only to be resurrected by an army of day traders hellbent on defying old-school conventions about what companies are worth.\nIt’s a win forMudrick Capital Management, which specializes in distressed companies and has supported AMC with a series of stock and debt deals over the past year. It’s also an unusual role for a fund best known for trading in the debt of troubled companies.\nRaising cash through an equity sale to a single holder is relatively rare in U.S. markets. Having the holder flip the stock right after buying it is almost unheard of -- usually the buyer is an existing stakeholder trying to send a message of stability to the market. Mudrick’s role in the AMC sale bears a passing resemblance to underwriters in a public offering who purchase shares with the specific intent of reselling them to investors.\nThe involvement of Mudrick “has been pivotal to the survival of AMC over the past year, so it shouldn’t come as a surprise they threw them a bone,” Edward Moya, senior market analyst at Oanda Corp. said in a message. “This was a perfect time to have a capital raise as the retail army of traders were excited AMC was raising money for acquisitions and investments.”\n\nThey also apparently ignored Mudrick’s dim view of AMC’svaluation. While the stock stuttered briefly on Tuesday after the news of Mudrick’s sale broke, it still finished up 23% for the day at $32.04.\nThat’s more than four times the dismal price the shares fetched at the end of 2019, and that was before anyone was talking about Covid-19 at movie theaters. Back then, the big concern was about losing audiences to streaming services, a threat hasn’t gone away. The last time AMC’s stock closed at a higher level -- and just barely -- was all the way back in 2017.\nCurrent trading pegs AMC’s market valuation at more than $16 billion, even while the chain carries more than $5 billion of debt and shareholder equity that’s negative by more than $5 a share.\n“It is clear that fundamentals don’t support common stock levels at all (which makes sense for the Reddit crowd),” Mark Levin of AsteriskAdvisorssaid in a note.\nBond Trading\nSomeone nevertheless is making money after this year’s huge rally, including Mudrick’s New York-based investment firm. In addition to acquiring shares, Mudrick Capital profited from buying bonds at a discount and converting part of its stake into equity earlier this year. Just how much he’s ahead depends in part on how much Mudrick Capital got for its newest stake of 8.5 million shares, which were obtained for $27.12 each.\nA representative for Mudrick declined to comment, and AMC, based in Leawood, Kansas, didn’t respond to requests for comment.\nThe most recent deal with Mudrick “will allow us to be aggressive in going after the most valuable theater assets, as well as to make other strategic investments in our business and to pursue deleveraging opportunities,” AMC Chief Executive Officer Adam Aron said in a statement disclosing the share sale.\nNo Lockup\nThe company said Tuesday it sold stock to Mudrick with plans to “go on offense” by acquiring theater assets, make strategic investments and cut debt. Unlike some stock sales, the deal with Mudrick didn’t include a minimum holding period. Instead, the shares were “freely tradeable,” meaning Mudrick Capital could sell the stock at any point or in any amount it chose.\nThe investment firm also benefited earlier this year from buying AMC debt at steep discounts, acquiring second-lien bonds for 7 to 20 cents on the dollar, Bloomberg reported. Those securities rose to about 70 cents in January. The hedge fund also held a position in AMC’s secured debt.\nPaid PostThe Future of FinanceBybit\nRead More: Mudrick Capital Gains $200 Million on AMC, GameStop Bets\n“The market did not believe AMC would be able to get through the downturn -- we did,” Mudrick said in aninterviewin January. “With the rally, they need to start chipping away at their capital structure. AMC should go register more shares, sell as much stock as they possibly can and use the cash to repay debt.”\nDay-traders commenting on public forums realize that the investment firm is hardly one their own kind. “Mudrick is definitely not an ape,” said one commenter, using a term Reddit users coined to refer to others who are bullish on so-called meme stocks. “Doesn’t matter in the end because we will recover this dump easily until market close.”\nBut questions remained around the type of share offering and valuation. With heavy borrowings and double-digit coupons on its existing bonds, “this is not a sustainable amount of debt,” said Matt Zloto, the co-head of U.S. high-yield research at CreditSights. “Depending on the type of acquisition AMC makes, it could be positive, if it grows cash flow and earnings enough.”","kind":null,"is_publish_news":false,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":113679317,"gmtCreate":1622614740439,"gmtModify":1704187367760,"author":{"id":"3578710390898389","authorId":"3578710390898389","authorIdStr":"3578710390898389","name":"hwhw123","avatar":"https://static.tigerbbs.com/d8403e7374bdcb179a82aff3b6d9338e","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3578710390898389"},"htmlText":"Like and comment please ??","listText":"Like and comment please ??","text":"Like and comment please ??","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":2,"repostSize":0,"link":"https://ttm.financial/post/113679317","repostId":1109356856,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":4542823,"gmtCreate":1622616639680,"gmtModify":1680792618965,"authorId":3578710390898389,"author":{"id":3578710390898389,"authorId":3578710390898389,"name":"hwhw123","avatar":"https://static.tigerbbs.com/d8403e7374bdcb179a82aff3b6d9338e","vip":1,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":113679317,"type":1,"supId":4542600,"prevId":0,"content":"good day to you. [鬼脸] [龇牙] [得意]","text":"good day to you. [鬼脸] [龇牙] [得意]","html":"good day to you. [鬼脸] [龇牙] 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and comment","listText":"like and comment","text":"like and comment","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/113641001","repostId":1109356856,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":113640796,"gmtCreate":1622613875915,"gmtModify":1704187354536,"author":{"id":"3584955397849410","authorId":"3584955397849410","authorIdStr":"3584955397849410","name":"jxboi","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":1,"crmLevelSwitch":0,"idStr":"3584955397849410"},"htmlText":"AMC to the moon","listText":"AMC to the moon","text":"AMC to the 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