AMC Stock – Playboy Uses AMC’s Playbook. It’s Selling Stock After Its Shares Soared.
Playboy’s parent company is taking advantage of its soaring stock price and selling stock to raise cash. It’s a page right out of
AMC Entertainment Holdings
‘ playbook, which has used its popularity with investors to sell hundreds of millions of dollars of stock this year.
Playboy’s stock sale comes just months after it raised money and went public in a merger with a blank-check company.
At Monday’s close,
(ticker: PLBY) stock had soared 421% from the price at which that deal with Mountain Crest Acquisition Corp. was struck last fall, with the bulk of those gains coming since March. It rose 13.4% on Monday, to close at $52.09. Mountain Crest and its shareholders invested in
at $10 per share.
The Hugh Hefner-founded brand has morphed into a global consumer-products start-up, in categories including apparel and sexual wellness. PLBY Group also has a growing licensing business. It brought in close to $150 million in revenue last year and had a net loss of about $5 million. The company had a market value of nearly $1.8 billion on Monday.
PLBY Group filed on Monday to sell up to 4.6 million shares to fund future growth and acquisitions. That would bring in $240 million at Monday’s closing price, but PLBY Group stock was down about 8% in after-hours trading and attracting institutional investors to the offering at current levels could be a challenge. PLBY Group’s merger with Mountain Crest, a special purpose acquisition company, or SPAC, brought in about $100 million.
AMC Entertainment Holdings
(AMC) has managed to recapitalize its balance sheet and bring in many times more cash than its market value at the start of the year in a series of stock sales while shares have soared more than 2,000%. Unlike AMC’ss recent opportunistic stock sales, however, Playboy isn’t selling the shares into the open market. Instead, it has hired investment bank underwriters — with Canaccord Genuity and Stifel leading — to sell the shares to institutional investors in a traditional offering. Both the initial public offering and SPAC markets have seen a frenzy of activity over the past year, and Playboy is dipping its toes into both just a few months apart.
One quirk of the transaction is that even though PLBY Group is already public and has had stock trading on the Nasdaq exchange for several months, the stock sale will effectively be its initial public offering. The company has filed an S-1 form with the Securities and Exchange Commission, usually reserved for companies going public in an IPO.
That’s because PLBY Group itself never sold any stock to public investors—in its current incarnation that is, the company was previously public until a private-equity buyout in 2011. Its Nasdaq listing comes from its SPAC partner, Mountain Crest, which completed its IPO in June 2020. A SPAC goes public as just a pool of cash. When it merges with a private operating business, the target company gets the money and takes over the SPAC’s exchange listing.
Turns out a company can do both a SPAC merger and an IPO in the same year.
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