AMC Will Sell Shares
The company’s stock dropped, recovered and fell again after AMC said in a regulatory filing that it would sell an additional 11.55 million shares.
AMC’s shares whipsaw after it tries to capitalize on its stock’s eye-popping rally.
By Eshe Nelson
June 3, 2021, 8:06 a.m. ET
By The New York Times
AMC Entertainment’s gravity-defying run in the stock market stalled on Thursday after the movie-theater chain said it planned to sell an additional 11.55 million shares. At the stock’s closing price on Wednesday, that sale would raise more than $720 million.
The stock slid more than 30 percent early on Thursday, recovered to turn positive, then fell again. It ended the day down 20 percent.
AMC’s price had nearly doubled on Wednesday after the company said it would offer free popcorn and other perks to the more than three million retail investors that own shares in the company.
AMC has been embraced by small investors seeking to raise the price of certain companies that have come to be known as meme stocks because the traders promote their ideas on social media platforms. These small shareholders now own 80 percent of AMC, the company said. Their interest in companies has resulted in eye-popping surges in share prices. AMC, which was trading at just above $2 a share at the start of the year, is now selling for about $61.
Elsewhere in the markets.
U.S. stocks fell as traders cautiously approached two reports on the labor market. Weekly data on initial claims for state jobless benefits showed that claims rose slightly last week to about 425,000.
On Friday, the Labor Department will publish its monthly jobs report. Last month, that report showed an unexpectedly small increase in hiring in April.
The S&P 500 ticked down 0.4 percent. The Nasdaq composite fell 1 percent.
Shares of Tesla, one of the largest companies in the S&P 500, fell 5 percent after the company reported that May sales in China had fallen by nearly half.
Investors are also watching the Federal Reserve closely for signs that it will pull back its monetary stimulus, which has helped keep asset prices high. Patrick Harker, the president of the Federal Reserve Bank of Philadelphia, said on Wednesday that it “may be time to at least think about thinking about tapering” the Fed’s government bond-buying program.
On Wednesday, the Fed announced that it would sell its relatively small holdings of corporate bonds, which were bought last year to stabilize the bond market in the early months of the pandemic.
Most European stock indexes were down on Thursday. The FTSE 100 in Britain dropped 0.6 percent, falling more than other major European indexes. There is speculation that the final lifting of social-distancing restrictions in Britain, scheduled for June 21, might be delayed because of the spread of the coronavirus variant first discovered in India.