Troubled Companies Take Page From AMC Playbook in Seeking Stock-Market Lifelines

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Troubled companies are mimicking AMC, betting equity markets will support them despite heavy debt loads, recent losses and industry headwinds

The frenzied stock-buying activity that may have saved AMC Entertainment Holdings Inc. from bankruptcy is opening up a potential escape hatch for other troubled borrowers as well.

More companies with steep financial challenges are seeking a lifeline from equity markets, eager to capitalize on thefrom nonprofessional investors. Earlier this month, coal miner Peabody Energy Corp. , offshore drilling contractor Transocean Ltd. and retailer Express Inc. , all announced plans to sell stock, betting equity markets will support them despite heavy debt loads, recent losses and industry headwinds.

Selling stock isn’t the typical way for distressed companies to grab a lifeline. More often, they are forced to seek out rescue loans, sell off assets or pursue a merger, which can be difficult because of their existing debt. But equity markets now are more open to supporting troubled issuers, in large part because of risk-hungry individual investors eager to speculate, according to bankers and investors following the trend.

The planned equity sales, if successful, mark another way nonprofessional investors have reshaped financial markets since they began to demonstrate their collective power last year,

 

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🤣 Doesn't work like that... if Hostess, Waffle House or Little Caesar's needed a cash infusion they would help out...but clothes..Who the hell needs useless material things

Many people are saying 'these companies should get their affairs in order instead of 'betting' on trying to be the next AMC.'

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