Closed signs are seen on an AMC Theatre during the outbreak of the coronavirus disease (COVID-19), in New York City, April 29, 2020.
Brendan McDermid | Reuters
Investment firm Mudrick Capital has exited both its debt and equity positions in AMC Entertainment, sources tell CNBC’s David Faber, as the theater chain’s stock continues to trade wildly amid a boom in speculative retail trading.
AMC announced earlier this week that it had sold 8.5 million equity shares to Mudrick for $230.5 million. The hedge fund was also involved in a key $100 million debt restructuring deal with AMC in December.
AMC has been one of the main meme stocks whose share price has risen dramatically following high interest from retail traders on Reddit. Even with an 18% decline on Thursday, the stock is still up 96% this week.
The theater chain, who saw its business effectively shuttered during the pandemic, has taken advantage of the rising price to raise cash.
The company sold another 11.5 million shares on Thursday for $587 million. CEO Adam Aron told YouTube host Trey Collins that he wants to issue an additional 25 million shares to raise cash.
The company said plans to use the funds to pay down debt and rent liabilities and potentially acquire other theaters.
Bloomberg News first reported that Mudrick had exited its equity position in AMC.