Why AMC Entertainment Stock Dropped Today
Shares of AMC Entertainment (NYSE: AMC) dropped as much as 5% today after the company again warned of a liquidity crunch as it seeks more capital. The movie theater chain is looking to raise $750 million to stave off bankruptcy.
AMC has entered into an agreement with Mudrick Capital Management to issue $100 million in fresh notes that will come due in 2026. AMC is paying a hefty interest rate of 15% to 17%, depending on certain factors, to reflect the higher risk associated with the paper. Additionally, Mudrick will receive 8.2 million shares as compensation for making the commitment. Mudrick, which specializes in distressed credit investing, has also agreed to exchange $100 million of existing notes it already holds for 13.7 million in shares.
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Source Fool.com
