AMC earns $587M in stock offering, shares drop 18%

June 3 (UPI) -- AMC Entertainment said Thursday that it had raised more than $587.4 million after completing a new stock offering announced earlier in the day.

The company said it sold 11.55 million shares at an average price of about $50.85 per share after announcing in a filing Thursday morning that it may sell some of the 11 million shares "from time to time."

"Bringing in an additional $587.4 million of new equity on top of the $658.5 million already raised this quarter results in a total equity raise in the second quarter of $1.246 billion, substantially strengthening and improving AMC's balance sheet, providing valuable flexibility to respond to potential challenges and capitalize on attractive opportunities in the future," AMC President and CEO Adam Aron said.

In its filing announcing the stock offering on Thursday, the company included a warning of the potential risks associated with investing.

"The market prices and trading volume of our shares of Class A common stock have recently experienced and may continue to experience, extreme volatility, which could cause purchasers of our Class A common stock to incur substantial losses," it said.

AMC shares saw a slight boost after the announcement, closing the day down 17.92% after falling by as much as 30% earlier in the day.

Members of Reddit's r/WallStreetBets have driven AMC stock up despite the movie theater chain's business suffering as a result of the COVID-19 pandemic.

AMC stock has risen more than 140% this week and 2,900% on the year as online investors sought to drive up the stock price to force short sellers betting against the stock to purchase back the shares at a higher price, similar to activity surrounding GameStop earlier this year.

On Wednesday, AMC also launched an online portal on its website for investors and offered perks including free popcorn and exclusive screenings for stock holders.