Shares of AMC Entertainment (NYSE: AMC) surged on Monday after the nation’s largest movie company said it raised $917 million in equity and debt capital. As of 2:45 p.m. EST, AMC’s stock price was up 30%.
AMC’s new cash includes $506 million in stock sales and $411 million in new debt. Management believes that these measures will allow AMC to “get through this dark winter affected by the coronavirus”. “Today the sun is shining on AMC,” AMC CEO Adam Aron said in a press release.
Aron even went so far as to claim that investors no longer need to worry about AMC failing in the short term. “That means any talk of impending bankruptcy for AMC is completely irrelevant,” Aron said.
With its strengthened balance sheet, AMC believes it has the cash to fund operations through “deep into 2021”. The company warns, however, that its future cash requirements are difficult to predict in part due to uncertainty related to the increase in coronavirus infections and the yet-to-be-determined results of COVID-19 vaccination programs.
“Going forward, for AMC to be successful in the medium term, we will need a large portion of the general public in the United States and abroad to be vaccinated,” Aron said.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end advice service Motley Fool. We are heterogeneous! Challenging 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 wealthier.