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AMC stock surges as hedge fund buys — then sells — $230M stake

Mount Equity Group Tokyo Japan > News > Business > AMC stock surges as hedge fund buys — then sells — $230M stake

Suspense, mystery, intrigue — the latest AMC drama has a plot twist not even the movie theater company saw coming.

AMC Entertainment announced Tuesday it will raise $230.5 million by selling 8.5 million shares to hedge fund Mudrick Capital, saying it plans to use the cash to “go on the offense” by pursuing opportunistic acquisitions across the virus-ravaged movie-theater sector.

But just hours later, it was reported that Mudrick Capital had sold all of its shares, saying the stock was “overvalued,” and pocketing a tidy profit in the process. The second headline didn’t tank AMC’s shares, however. They closed up 23 percent, higher than the 15-percent boost they got after the initial news.

Mudrick valued AMC stock at $27.12 a share, giving the company a valuation upwards of $13 billion — a remarkable number for a stock that had dropped to $4 six months ago as its business was on the brink of bankruptcy amid nationwide COVID-19 lockdowns.

AMC is reportedly looking to make acquisitions as movie lovers return to theaters.AFP via Getty Images

“I’ve never seen anything like this,” LightShed Partners analyst Rich Greenfield told The Post. “Good news is positive for the stock; bad news is even