AMC Seizes Rally To Shed Debt; GME, Meme Stocks Reverse Lower

Core Viewpoint - Meme stocks, including AMC and GME, experienced a significant reversal after a substantial rally earlier in the week, with AMC taking steps to reduce its long-term debt through a private debt/equity swap agreement [1][4]. Group 1: AMC Theaters - AMC entered a private debt/equity swap agreement to exchange 23.3 million shares of newly-issued stock for $163.9 million worth of company bonds due in 2026, with shares issued at an average price of $7.33 per share [1]. - The theater chain's long-term debt was reported at $8.6 billion at the end of 2023, indicating a substantial financial burden [1]. - AMC raised $250 million by selling 72.5 million shares at an average price of $3.45 per share earlier in the week [1]. Group 2: Market Analysis - Analyst James Goss noted that the recent meme stock surge provides AMC with an opportunity to raise funds, which could support liquidity and debt reduction [2]. - The first quarter of the year was described as a "difficult start," and the second quarter is also off to a slow start, highlighting ongoing challenges for AMC [2]. - Goss expressed hope that AMC could eventually achieve a capital structure that would attract institutional support, although significant uncertainty remains due to high leverage [2]. Group 3: Meme Stock Performance - Meme stocks, including AMC and GME, saw sharp declines after a week of significant gains, with AMC stock falling 9.8% and GME stock tumbling over 13% [4]. - GME stock had soared 179% for the week as of Tuesday's close, while AMC shares had rallied more than 135% [4]. - Other meme stocks like Virgin Galactic and Koss also experienced declines, with Koss plummeting nearly 19% after a 92% increase earlier in the week [4].