AMC backer Silver Lake sells shares for $113 million profit amid surge – Business Insider – Business Insider

  • Silver Lake sold its shares in AMC Entertainment for a $113 million profit Thursday, the firm disclosed.
  • The private-equity firm converted its debt into equity in AMC after Wednesday’s share-price jump.
  • Reddit day traders sent AMC, GameStop, and other stocks soaring this week in a short-squeeze.
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Silver Lake Partners, a private-equity firm and, until recently, a major investor in AMC Entertainment, disclosed in a regulatory filing Friday that it has sold all of its equity in the company.

Silver Lake dumped its shares for $713 million on Thursday, turning a roughly $113 million profit on its initial investment, according to the filing.

The move came near the peak of AMC’s share-price surge this week, fueled in large part by Reddit day traders who had targeted short-sellers of AMC, GameStop, and other stocks, who have since lost around $19 billion. AMC shares were up as much as 370% this week.

The surge this week triggered $600 million of Silver Lake’s convertible debt notes, allowing the company to exchange its risky debt for the surging equity. The debt was ultimately swapped into stock at a price of $13.51, according to a regulatory filing on Thursday.

In Friday’s filing, Silver Lake said it had sold its equity at an average stock price of $16.05.

Read more: 40 insiders reveal the meteoric rise of Silver Lake’s Egon Durban, the tech-focused PE firm’s No. 1 dealmaker who strong-armed his way to the top and is about to get $18 billion more to invest

Silver Lake originally scooped up the $600 million in AMC debt in 2018 and pumped an additional $100 million loan into the company as the pandemic ravaged its business, and AMC was still warning that it might have to file for bankruptcy, according to The Wall Street Journal

But a nearly $1 billion cash infusion on Monday and the Reddit-fueled rally this week have helped AMC avoid that road for now.

Read more: Silver Lake made a bold bet on a struggling Airbnb at the peak of the pandemic. Now that wager on the future of travel is paying off in a big way.