Buying stocks like theater chain AMC Entertainment (NYSE:AMC) was a great plan for some back in 2020, as meme stocks saw their share prices surge. As a result, AMC was able to clean up during the pandemic era thanks to its stock sales. Reports note that, so far, $2 billion worth of AMC stock was sold during the pandemic. That’s almost as much as the stock’s entire market cap.
AMC also recently announced plans to stage a 1-for-10 reverse stock split. Additionally, it revealed a plan to convert the recently-offered APE unit—both an in-joke and an acronym for “AMC Preferred Equity” unit—into common stock shares.
AMC is frantically trying to get out from under a debt load that sits at around $5.4 billion. Aside from that, the company also wants to raise funds to drive future merger and acquisition (M&A) activity that should improve the company’s fortunes down the line. Between share dilution and the routine use of so-called “dark exchanges” to trade shares, however, there’s a lot of concern for investors as the result of such moves.
A group of investors that are deeply concerned with AMC’s operations of late is hedge funds. Hedge fund perception of AMC recently went “very negative,” as they sold 995,600 shares just last quarter.
