National CineMedia Inc.’s stock rose on Wednesday after movie theatre operator AMC Entertainment Holdings Inc. announced that it had purchased a significant stake in the cinema advertising network operator.
AMC AMC, -8.03 percent said it owns 5.95 million shares of National CineMedia NCMI, -2.31 percent, or 6.8% of the outstanding shares, in a 13G filing with the Securities and Exchange Commission late Tuesday. According to FactSet data, this would make AMC the third largest shareholder.
The 13G filing indicates a passive investment, implying that AMC has no plans to modify the company.
The shares of National CineMedia rose as far as 21.4 percent intraday before settling at 6.1 percent in morning session. Since closing at a record low of $1.42 on Friday and Thursday, it has risen 8.5 percent in a three-day winning streak.
The shares AMC now owns are worth around $9.2 million at current pricing.
Meanwhile, AMC’s “meme” stock rose 7.5 percent in morning trading, bringing its total gain to 33.8 percent since a one-year low of $10.37 on May 11.
National CineMedia’s stock has down 66.3 percent in the last year, while AMC shares have dropped 1.1 percent and the S&P 500 index SPX, +0.01 percent has dropped 2.9 percent.
Investors may not be surprised by AMC’s investment in a cinema advertising company, especially when compared to the announcement two months ago of an investment in gold and silver miner Hycroft Mining Holding Corp. HYMC, -8.03 percent.
The miner’s stock had closed at a record low of 29 cents just days before the Hycroft transaction was disclosed. At $1.33 on Wednesday morning, it was down 0.8 percent.