AMC leads ‘meme stocks’ higher after $230 million capital raise By Reuters

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© Reuters. FILE PHOTO: An AMC theatre is pictured amid the coronavirus disease (COVID-19) pandemic in the Manhattan borough of New York City, New York, U.S., January 27, 2021. REUTERS/Carlo Allegri/File Photo

(Reuters) – Shares of AMC Entertainment (NYSE:) Holdings Inc jumped 15% on Tuesday after the movie theater chain announced a $230 million capital raise, leading gains among a group of “meme stocks” that have benefited from another surge in buying by small-time investors in recent weeks.

The company said it would issue 8.5 million shares to Mudrick Capital, its latest share sale this year it cashes in on a 1,150% jump in its stock in 2021.

The firm said it would use the proceeds to invest in its existing theaters, which are set to benefit from a recovery in demand as more states lift COVID restrictions on social gatherings.

The world’s largest cinema chain operator has so far raised about $1.35 billion through share sales since December 2020.

Sentiment around AMC was also supported by strong weekend box office collections in North America, led by John Krasinski’s post-apocalyptic thriller “A Quiet Place Part II”, one of the first major theatrical releases since last year.

The Memorial Day holiday is also expected to have boosted ticket sales as widespread vaccinations bring in more Americans to theaters.

Meanwhile, U.S.-listed shares of security software provider BlackBerry (NYSE:) also rose 7% premarket, while video game retailer GameStop Corp (NYSE:) was trading 3.3% higher.

AMC and GameStop have been the most bought stocks on brokerage Robinhood’s retail trader-focused app, as well as on that of UK-based Freetrade, according to recent data.

On trading-focused social media site Stocktwits, nearly 96% of messages related to AMC featured positive sentiment toward the stock on Tuesday.

AMC and GameStop have both seen their stocks soar more than 10 times this year, propelled by heavy interest from retail traders on social media sites like Reddit. During that time, BlackBerry jumped more than 50%.

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