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Would the SEC have even allowed them to issue shares? Hertz tried to issue new shares when their stock price was irrationally bid up but was blocked by the SEC.
by thekyle 6y ago
Would the SEC have even allowed them to issue shares? Hertz tried to issue new shares when their stock price was irrationally bid up but was blocked by the SEC. Its a little bit different because Hertz was going bankrupt but otherwise the situations are very similar.
- JumpCrisscross 6y ago> Would the SEC have even allowed them to issue shares? From the article: “Other companies in the midst of the Reddit frenzy whose financial quarters finished at the end of December and had already updated investors on their latest financial performance, were able to sell stock when their shares rallied at the end of January.” Hertz was a bankrupt company. Their shares were legally worthless. And they didn’t have a shelf offering already authorised. Different facts and circumstances.
- drexlspivey 6y agoAMC did exactly that, they sold a bunch of new shares at an inflated price
- dcolkitt 6y agoCorrect me if I’m wrong, but I thought the new AMC shares came from Silverlake exercising its convertibles, not AMC itself. Of course it still benefited AMC by reducing its debt load.
- deleted 6y ago[deleted]
- drexlspivey 6y agoIt was both, AMC completed an at the market offering during the pump and convertible bond holders also converted to stock
- dcolkitt 6y agoYou are correct. Thanks for pointing that out.
- v77 6y agoMatt Levine at Bloomberg has been covering this issue extensively. His newsletter is a must-read.