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Business News/ Companies / News/  AMC erases pandemic plunge after shares quadruple
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AMC erases pandemic plunge after shares quadruple

The shares surged as much as 310%, pushing it to the highest level since October 2018
  • AMC’s bonds also continued their tear along with the shares, reaching record highs and leading the US high-yield market on Wednesday
  • AMC said Monday that $917 million in new funds would get it through the next six months (AFP)Premium
    AMC said Monday that $917 million in new funds would get it through the next six months (AFP)

    AMC Entertainment Holdings Inc.’s stock price briefly quadrupled Wednesday, erasing last year’s pandemic-induced slump, before triggering several trading halts as it pared nearly half of those gains. The cinema operator is among a number of heavily shorted stocks rallying this week.

    The shares surged as much as 310%, pushing it to the highest level since October 2018. The stock has been trimming gains since then, triggering at least four trading halts for volatility. AMC said Monday that $917 million in new funds would get it through the next six months as the industry battles the effects of Covid-19, which has shuttered venues globally.

    Bloomberg Intelligence analyst Amine Bensaid said AMC is one of the names that’s been floated in social media for its high short interest, joining the likes of GameStop Corp. and Express Inc.

    The gain “isn’t based on fundamentals and appears to be similar to the GameStop run-up driven by retail investors, yet could help ease a severe liquidity crunch if the company capitalizes on the jump and issues additional shares," Bensaid wrote Wednesday.

    “While the recent move in AMC shares has been extraordinary, we remain positive on the outlook for the domestic box office coming out of the pandemic," B. Riley analyst Eric Wold said in an email to Bloomberg. “Management’s success in securing capital to avoid a near-term bankruptcy has clearly been a positive for investors."

    The shares were up 222% to $15.96 as of 11:35 a.m. in New York. Volume was 12 times higher than the three-month average.

    Short interest as a percentage of free float was 12%, according to data from S3 Partners, down from 61% in December. In London, shares of Cineworld Group Plc, another favorite among short sellers, jumped as much as 21%. The U.K. firm competes with AMC’s Odeon unit in Britain.

    AMC’s bonds also continued their tear along with the shares, reaching record highs and leading the US high-yield market on Wednesday. The notes due 2026 reached roughly 63 cents on the dollar, up from a low of 5 cents set in November, according to Trace bond trading data.

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    This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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    Published: 28 Jan 2021, 12:27 AM IST
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