Express sinks 25% as the retailer follows fellow Reddit favorite AMC in announcing new share sale

Traders NYSE green
  • Express dropped 25% on Thursday after the retailer said it plans to sell up to 15 million shares.
  • The clothing retailer told investors in an SEC filing that they could lose their money in its volatile stock.
  • Fellow meme stock AMC on Thursday sold 11.5 million shares.
  • See more stories on Insider’s business page.

Express sank Thursday on plans by the company to sell up to 15 million shares. The clothing retailer that’s part of the group of volatile and so-called meme stocks favored by retail traders cautioned investors about potential losses.

Express shares swung lower by as much as 25%, hitting an intraday low of $4.86 after the company said it could sell up to 15 million shares under an agreement with BofA Securities, according to a filing with the Securities and Exchange Commission. That amount would represent about 23% of Express’s 64.97 million common shares outstanding.

The “at-the-money” agreement would see sales take place from time to time at or near market prices. Express shares during Thursday’s session pared their losses to 20%.

“Significant fluctuations in the market price of our Common Stock have been accompanied by reports of strong and atypical retail investor interest, including on social media and online forums,” said Express.

It added: “The extreme volatility of the market prices and trading volume that our shares of Common Stock have recently experienced, and may continue to experience could cause purchasers of our Common Stock to incur substantial losses.”

Retail investors active on Reddit’s WallStreetBets forum and other sites have defended shares of Express along with those in AMC Entertainment, GameStop and other companies against short-sellers.

Express’s warning to investors echoed that of AMC’s on Thursday as the movie-theater chain outlined plans to sell up to 11.6 million shares. AMC dropped sharply Thursday but a recent rally has contributed to the stock running up by more than 2,200% this year.

“Under the circumstances, we caution you against investing in our Class A common stock, unless you are prepared to incur the risk of losing all or a substantial portion of your investment,” AMC said in an SEC filing Thursday.

Express shares, meanwhile, have rocketed up roughly 450% during 2021. The stock had been higher earlier Thursday after the retailer turned in a first-quarter adjusted loss of $0.55 per share, narrower than the adjusted loss of $0.58 expected in a FactSet poll of analysts.

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