The company is hitting the market with another 11.55 million shares, potentially, as it filed an at-the-market offering. This one goes out to all us traders and investors rather than the lump sum deal they did with Mudrick Capital a few days ago. If successful in the very near term, AMC could pull another $700 million, give-or-take $50+ million, into its coffers. That will buy a lot of free popcorn.
Management was blunt about the offering. They know the stock is disconnected from reality. They aren't afraid to say it and that might work for them. Those statements will give Wall Street more opportunity to talk about how overvalued it is or how it is worth $1. In turn, the "Apes" (as they call themselves) will become more frenzied, calling out a louder rally cry.
In reality, I simply appreciate the blunt honesty. We don't see it enough on Wall Street from executives. There is too much fluff and spin in most press releases and announcements. Sure, there are a handful of straight shooters out there, but they are overwhelmed from the rest of the world afraid to tell it like it is. And they're doing it with free popcorn. Talk about playing to the crowd.
AMC isn't alone hitting the market with supply. Express (EXPR) is also serving up a 15 million share at-the-market equity offering, seeking to raise $75 million. This comes on the heels of the company losing $0.55 per share on $345.8 million in shares. Both numbers came in better than expectations. Despite the loss, management expects positive operating cash flow beginning in the current quarter. EBITDA should also be positive during the second half of the year, so an extra $75 million would come in handy. If this one actually retraced into the $3s or low $4s, it is probably worth serious consideration. I might even look at selling June or July $3 or $4 puts.
As far as the rest of the lineup goes, Blackberry (BB) , Workhorse (WKHS) , Koss (KOSS) , and Clover Health (CLOV) should consider taking advantages of the moves. Heck, even Tilray (TLRY) should consider jumping into the equity fray.
This is going to be a continued risk moving forward. Offerings will continue to hit the market as more and more executives realize cash is a good thing to have.