July 5, 2022

News of the Trade

Latest trading, investing, and financial news

AMC discloses large passive investment in National CineMedia

Shares of National CineMedia Inc. soared Wednesday, after movie theater operator AMC Entertainment Holdings Inc. disclosed that it acquired a large stake in the cinema advertising network operator.

In a 13G filing with the Securities and Exchange Commission late Tuesday, AMC
AMC,
+10.16%
said it owned 5.95 million shares of National CineMedia
NCMI,
+0.69%,
or 6.8% of the shares outstanding. That would make AMC the third largest shareholder, according to data provided by FactSet.

The 13G filing implies a passive investment, which suggests AMC doesn’t intend to make changes at the company.

National CineMedia’s stock shot up 18.6% in premarket trading. It had gained 2.1% the past two days, after closing at a record low of $1.42 on Friday and Thursday.

Based on Tuesday’s closing price of $1.45, the shares AMC now owns would be valued at $8.63 million.

Meanwhile, AMC’s “meme” stock rose 0.8% ahead of the open. It has run up 24.4% over the past four days, since closing at a one-year low of $10.37 on May 11.

Over the past 12 months, National CineMedia’s stock has plunged 68.2% through Tuesday, while AMC shares have slipped 8.1% and the S&P 500 index
SPX,
+2.02%
has eased 0.9%.

The disclosure of AMC’s investment in a cinema advertising company may not be such a surprise for investors, especially when compared with the disclosure two months ago of an investment in Hycroft Mining Holding Corp.
HYMC,
,
which is a gold and silver miner.

Days before the Hycroft investment was announced, the miner’s stock had closed at a record low of 29 cents. It closed Tuesday at $1.34.