AMC announces special dividend in the form of ‘Ape’ preferred shares; stock falls

The new APE units trade under the ticker “APE,” while the AMC common shares will continue to trade under “AMC.” AMC’s recent history is tied closely to the “meme” stock craze that started with GME in early 2021, along with many other stocks which the market had largely written off like BBBY, BB, FIZZ and others. Retail traders have continued to pile into the “HODL” mentality with day-to-day stock trading volume remaining high – many multiples of pre-2021. Stock price volatility has been digested by the retail following as a short-term hiccup to the long-term fight against the hedge funds. Option volume has followed a similar path, with option volatility expanding on the upside as traders position for the next mother-of-all-short-squeezes.

1. AMC Entertainment (AMC) has dominated financial headlines for weeks and the good folks of Reddit aren’t to blame.
2. It reported a net loss of $121.6 million compared to a net loss of $344.0 million a year ago.
3. The company has faced unsubstantiated internet conspiracy theories that there are millions of synthetic AMC shares in circulation, as well as calls for a share recount, according to the Wall Street Journal.
4. AMC standard options have been offered, while APE still trades without options.
5. APE shares don’t come out of nowhere but take 50% of the value away from AMC stock.

With the lawsuit settled, AMC implemented the APE conversion on August 25, 2023. Consistent with AMC’s reverse split, each share of APE was converted into 0.1 shares of AMC. In February, a pension fund shareholder filed a class action lawsuit against AMC, claiming the company was staging an unfair voting process.

How are investors and traders affected?

While the reverse split blurs the outcomes, higher share counts reduce EPS and lower the ownership percentage represented by each share. That included $110 million from AMC’s creditor Antara Capital, LP. Antara also accepted 91 million APE units as payment for $100 million of AMC’s outstanding debt. And while loss per share benefited from improved operations, it was also impacted by marking to market the “volatile” share price of the company’s gold mining investment, in Hycroft Mining. The extra cash could be used to fund acquisitions of other theaters, pay down debt or even push into unrelated businesses, like AMC’s 2021 purchase of a large stake in a gold mining company.

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AMC Theatres’ Shareholders Vote Against CEO Adam Aron’s $23.7M Pay Package

Investors got a taste of that market volatility as shares in AMC dropped eight percent after hours on Thursday, as the theater chain saw increasing attendance, but reported continued losses related to its unique investment strategies. Tastycrypto is provided solely by tasty Software Solutions, LLC. Tasty Software Solutions, LLC is a separate but affiliate company of tastylive, Inc. Neither tastylive nor any of its affiliates are responsible for the products or services provided by tasty Software Solutions, LLC. Cryptocurrency trading is not suitable for all investors due to the number of risks involved. The value of any cryptocurrency, including digital assets pegged to fiat currency, commodities, or any other asset, may go to zero.

This is one of the reasons why AMC shareholders had rejected the company’s previous efforts to issue more common stock. The initial APE units were distributed free of charge, but the company’s filings say it has the right to sell more of the units in the future — without additional shareholder approval. AMC said it is currently authorized to issue up to 1 billion APE units, and that it distributed a little more than half of that total with the dividend.

Investors aren’t sold on the strategy, however, and AMC stock has taken a beating. They characterize AMC as a value trap, arguing that there’s no fundamental improvement in the business. The company has struggled to generate profits for years, even before the pandemic shuttered movie theaters. The recent lmfx review capital moves and the surprise $0.01 diluted EPS reported in the second quarter of 2023 may simply be too little, too late for AMC. The main shareholder complaint is the dilutive effect of the conversion. The company essentially rolled what was formerly 1 billion shares of APE into the AMC share count.

How do I convert APE to common stock?

So this is bullish, but stay suspicious on how it will work out. Nevertheless, it is a great and brilliant move on AMC part and for the long term a good thing. Archer Daniels Midland shares plunged on Monday as the agribusiness giant said it’s put its chief financial officer under administrative leave and that it’s investigating accounting practices in its nutrition segment. Riley thinks that’s possible because AMC can now raise capital to fund expansion or acquisitions. Unfortunately for AMC, a tenfold rise in stock price hasn’t held. Because, as you’ll see below, AMC investors have more to process than a reverse split.

Meme Stock Traders are Here To Stay… but They’ll Need to Adapt

Always do additional research and consult a professional before purchasing a security. However, AMC’s financial health remains a cause for concern, according to data from RapidRatings, a company that assesses the finances of public and private companies. Shares of the meme-stock darling, which https://forex-review.net/ skyrocketed to a high of $72.62 on June 2, 2021, have fallen 29.7% this year. AMC’s stock closed up 2.47% at $18.66 on Thursday, well below its 52-week high of $52.79. Prior to that transaction, AMC had not split its stock, either positively or negatively, since it listed on the NYSE in 2013.

Well, this morning they jumped again 14%, opening at $24.06 and hitting a high of $27.50. At the time of this post’s publication, AMC shares were trading at $25.02. However, AMC is treating its preferred shares slightly differently.

Because the APE units are preferred equity, there are different rights in a potential bankruptcy proceeding than the regular common stock. A document from AMC about the offering says that the APE dividend is not expected to be a taxable event for U.S. investors. However, investors who own partial shares of AMC may receive a small cash portion instead of fractional APE units, which could be taxable. The document also said that some brokerages may take “several days” to transfer the APE units into individual accounts.

AMC shares dropped about 10 percent in after-hours trading Thursday; the price was $18.66 at the close of trading. While the bottom line impact for AMC of the APE units will not be clear for a while, there are details that investors in both the APE units and the common stock should know now. Here is an overview of how the dividend process works and what shareholders should know.

In the first day of ticket presales, the concert film sold $26 million—a record in advance ticket sales for AMC. The bulls argue that AMC’s capital restructuring moves have improved the company’s fundamentals and set the stage for growth. They also cite improving industry conditions, touting the summer box-office success of Barbie and Oppenheimer. Importantly, APEs were also convertible to AMC shares on a 1-to-1 basis. Of seven analysts surveyed by FactSet, three have a hold rating and four have a sell rating on AMC.

The stock dividend ultimately doubled AMC’s share count, just as a 2-for-1 stock split would. The creation of APEs laid the groundwork for AMC to access capital funding, without technically diluting its common shares. The company’s prior attempts to issue new common shares had not been well-received by investors.