S&P Global Ratings lowered its issuer credit rating on AMC Entertainment Holdings to selective default from CCC+, following a May 15 debt-for-equity exchange. S&PGR says AMC exchanged certain second-lien notes due 2026 for about 23.3 million shares of its Class A common stock. The agency also says it views AMC's capital structure as unsustainable and "subject to default risk given its heavy debt burden and negative free operating cash flow."
Tuesday's stock action may be a sign of market froth, a strategist told Yahoo Finance.
GameStop soared after the retailer announced it raised $933.4 million from a stock sale. AMC and other meme stocks rallied.