Private Equity Firm Silver Lake Cashes In AMC Shares For A $113 Million Gain

Private Equity Firm Silver Lake Cashes In AMC Shares For A $113 Million Gain

Photo by Kilyan Sockalingum on Unsplash.

Retail investors aren't the only ones seeing profits from the Reddit rally that has driven up the shares of GameStop Corp. (GME), BlackBerry Ltd. (BB), and Nokia Oyj (NOK).

What Happened

Silver Lake cashed out its equity positions in AMC Entertainment Holdings Inc. (AMC) during this week's trading. Reuters reports that the Menlo Park, California-based private equity firm sold its positions through several open-market transactions on Wednesday, raising $713 million. That move was possible because of the Reddit rally and a $600 million convertible bond investment that Silver Lake made in AMC in 2018. The rally pushed the bonds past their conversion price, according to Reuters.

Last summer, AMC, the world's largest movie theater chain, avoided bankruptcy by reaching a restructuring deal with Silver Lake and creditors.

Riding The Rally

AMC also sold shares this week, raising $304.8 million, it said in a statement on Wednesday. That adds to the $917 million it had raised since mid-December, the company said in an announcement on Monday.

“This means that any talk of an imminent bankruptcy for AMC is completely off the table,” AMC Chief Executive Adam Aron said in Monday's statement.
Another stock, real estate investment trust Macerich Co (MAC), known for operating shopping malls, also got attention in the WallStreetBets Reddit community at the center of the short-squeeze moves of recent weeks.

Its largest investor, Ontario Teachers’ Pension Plan, sold its entire stake of 24.56 million Macerich shares at $20.25 each after shares soared more than 100%.

Price Action

AMC ended the week up 180.93% to close at $13.26. Shares rose to $13.46 in Friday's after-hours trading.

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William K. 4 weeks ago Member's comment

Interesting, even without much details or any conclusion or opinion.