AMC Entertainment's shares rose by 37% after a court ruling blocked their plan to convert preferred stock to common stock and issue new shares.
The court ruling was in response to a lawsuit filed in February that accused AMC of rigging a shareholder vote over the stock conversion.
Delaware Judge Morgan Zorn struck down the plan, citing concerns about waiving too many claims from preferred shareholders not represented in the lawsuit.
AMC submitted a revised plan to settle the matter to the court, but the details of the new plan are not yet public.
AMC Entertainment is considered a "meme stock," which means its price is influenced by social media frenzy and can be highly unpredictable.
In early 2021, retail investors from the Reddit community r/wallstreetbets bought up shares of AMC, driving the stock price to an all-time high of $72.62.
The stock price surge allowed AMC to raise capital and avoid potential bankruptcy, but the company still faces debt issues.
CEO Adam Aron hopes that the stock conversion, if approved, will help raise the money needed to pay down the debt.
AMC's recent share price increase coincides with a successful weekend at the box office, with two movies grossing significant amounts in the U.S
AMC also reversed its controversial plan to charge more for seats with better views of the screen, as it did not result in increased sales.