Crazy News For Redbox RDBX Stock, Plus What Retail Investors Have To Say, Moomoo Trading App

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Redbox Entertainment Inc. operates a network of self-service kiosks in the United States. It operates a network of approximately 38,000 self-service kiosks, where consumers could rent or purchase new-release DVDs and Blu-ray Discs. The company provides installation, merchandising, and break-fix services to other kiosk businesses. It also produces, acquires, and distributes movies through its film distribution label, Redbox Entertainment, LLC, providing rights to talent-led films that are distributed across the company’s services, as well as through third party digital services. In addition, the company offers transactional and ad-supported digital streaming services, which include Redbox On Demand, a transactional service that provides digital rental or purchase of new release and catalog movies and TV content; Redbox Free On Demand, an ad-supported service providing free movies and TV shows on demand; and Redbox Free Live TV, an ad-supported television service giving access to approximately 100 linear channels. The company is based in Oakbrook Terrace, Illinois.

Redbox Entertainment (NASDAQ:RDBX) has entered into a warrant exercise letter agreement with special-purpose acquisition company Seaport Global (SGII).

In the deal, Seaport or its affiliate will exercise 1M private placement warrants at $11.50 per share.

That means Redbox would receive $11.5 million in cash, but wouldn't receive any proceeds from the sale of underlying shares. And Seaport's move may dent bullish investors' hopes that insiders hold on to their stock after a hefty run higher.

Those warrants were underwater immediately after the SPAC deal, Wedbush analyst Michael Pachter notes, so a stellar meme-driven run in Redbox has provided the opportunity for warrant holders to cash them out.

Redbox stock (RDBX) is down 13.2% Friday, pulling back after a massive one-month gain of 287%. Volume is low compared to the recent trading surge, at 5.7 million shares as of noon, vs. a recent full-day average of 21.1 million shares.

Meanwhile it's another wrinkle in Redbox's deal to be acquired from Chicken Soup for the Soul Entertainment (CSSE), itself up 2.1% Friday. Pursuant to CSSE's acquisition deal, Redbox stockholders are set to receive a fixed exchange ratio of 0.087 of a share of CSSE class A common stock per Redbox share.

At Friday's midday prices, that implies a per-share value for Redbox (RDBX) of 52 cents a share, while Redbox stock is currently trading at $10.15 per share.

Short interest in Redbox nearly quadrupled in the two months leading to the end of May, with a reported 4.1 million shares short (just under 38% of the float). Redbox had about 12.6 million shares outstanding at last report, but implied shares outstanding (assuming conversion of subsidiary equity into common shares) reaches to 45.4 million.

Pachter actually expects Redbox to be profitable next quarter, amid an improved movie release schedule, but given the company was headed for insolvency when Chicken Soup for the Soul stepped in with its deal, "the meme investors are wrong on this one."

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