AMC stock dips on $250M stock sale announcement

AMC Entertainment (AMC) shares are trading lower Thursday afternoon after the company filed to sell up to $250 million worth of its stock. The movie theater chain is looking to strengthen its balance sheet, using the proceeds from the stock sales to pay down debt. AMC also indicated that last year's Hollywood strikes impacted the box office in the first quarter.

Akiko Fujita and Josh Lipton break down the latest developments for the movie theater chain.

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Editor's note: This article was written by Gabriel Roy.

Video Transcript

JOSH LIPTON: AMC shares, they are nosediving after failing to sell up to $250 million worth of stock. So this was interesting one. They did file to sell a big chunk worth of stock. The movie theater chain looking at, it sounds like just strengthened its balance sheet, Akiko. Saying it's going to use the proceeds from the stock sales to pay down debt or other general corporate purposes. The company also did say, and I thought this was interesting to find, that last year's Hollywood writers and actors strikes, that did impact the Box office in the first quarter. So that finally, they did also flag that.

AKIKO FUJITA: Yeah, trying to boost a little liquidity here, especially with the Box office. So not getting a big lift at least in the first quarter.

JOSH LIPTON: Yeah. It's interesting. You'll see analysts who cover this name, Akiko and they'll say like, they did actually expand market share last year, and they'll say listen, they think they can do it again this year. But then they'll also, the heavy debt load here, the lack of dividends, some analysts say that just overshadows any even potential positives.