- Silver Lake sold its shares in AMC Entertainment for a $US113 million profit Thursday, the firm disclosed.
- The private-equity firm converted its debt into equity in AMC after Wednesday’s share-price jump.
- Reddit day traders sent AMC, GameStop, and other stocks soaring this week in a short-squeeze.
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Silver Lake Partners, a private-equity firm and, until recently, a major investor in AMC Entertainment, disclosed in a regulatory filing Friday that it has sold all of its equity in the company.
Silver Lake dumped its shares for $US713 million on Thursday, turning a roughly $US113 million profit on its initial investment, according to the filing.
The move came near the peak of AMC’s share-price surge this week, fuelled in large part by Reddit day traders who had targeted short-sellers of AMC, GameStop, and other stocks, who have since lost around $US19 billion. AMC shares were up as much as 370% this week.
The surge this week triggered $US600 million of Silver Lake’s convertible debt notes, allowing the company to exchange its risky debt for the surging equity. The debt was ultimately swapped into stock at a price of $US13.51, according to a regulatory filing on Thursday.
In Friday’s filing, Silver Lake said it had sold its equity at an average stock price of $US16.05.
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Silver Lake originally scooped up the $US600 million in AMC debt in 2018 and pumped an additional $US100 million loan into the company as the pandemic ravaged its business, and AMC was still warning that it might have to file for bankruptcy, according to The Wall Street Journal.
But a nearly $US1 billion cash infusion on Monday and the Reddit-fuelled rally this week have helped AMC avoid that road for now.