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AMC's preferred stock units are drawn to crowds as AMC's stock price rises above 13%

  • AMC shares closed 19% higher on Friday amid heavy volatility.
  • AMC Entertainment introduces a preferred stock unit, ticker APE.
  • Preferred stock may be dilutive for shareholders, but is currently being issued as a bonus.

update: AMC Entertainment shares opened the week up 13.6% on Monday following Friday’s schizophrenic price move. The stock is currently trading at $25.20 per hour heading into Monday’s New York session. Fans of meme stocks seem to love the introduction of preferred stock units that will be granted to record holders on August 15th. The stock is expected to rise steadily until next Monday, when the ex-dividend date approaches. The stock has already seen him trade as high as $27.50 in the session. The $20 call, which expires this Friday, August 12, is up 88% on Monday and is currently trading at $5.65.A total of 2,615 contracts were traded on Monday.

“Today we storm” was a call from AMC CEO Adam Aron to AMC’s Ape followers with the announcement of AMC preferred stock units trading under ticker APE. The preferred stock unit has a par value of his $0.01 and will be issued as a bonus to all existing common stockholders. Confusion reigned in the announcement, quite unlike the raid the AMC Apes had been waiting for. AMC’s stock price fluctuated from an 11% drop to a 19% gain on Friday. You could say this was his typical day in the daily life of an AMC shareholder. In other news, AMC reported results completely overshadowed by his APE preferred stock news.

AMC Stock News

Actual earnings were slightly higher than expected, with an expected loss of -$0.23 per share, but an actual EPS of -0.20. However, earnings were marginal. The consensus was he was $1.16 billion against $1.18 billion. Attendance was strong, reflecting the increasing openness of society and the popularity of releases throughout the quarter.

AMC Preferred Stock News

I will start working on the task in front of me now. This result was completely overshadowed by the announcement of the AMC Preferred Stock Unit (APE). This got AMC forces excited about the expected so-called bonus priority share. But upon closer inspection, the apes are all wrong. They could probably be diluted very heavily and there’s nothing you can do about it.

AMC shareholders will receive preferred stock units, not preferred stock. These AMC Preferred Stock Units trade under the ticker APE. For each share he holds in AMC, he gets one Preferred Unit. This gives him 1 extra vote. This will not compromise your voting rights. AMC has issued just under 517 million of his preferred stock to all AMC shareholders.

From AMC’s own SEC filings:

“Each AMC Preferred Stock Unit represents a one-hundredth (1/100) interest in our Series A Convertible Participating Preferred Stock (“Preferred Stock”). Each share of preferred stock is initially convertible into one share. Under the conditions below, 100 shares of common stock of the Company will be acquired. ”

voting rights

Each AMC Preferred Stock Unit represents a one-hundredth (1/100) interest in a preferred stock, with preferred stock holders initially having 100 votes per share and voting together It’s for When compared to holders of common stock on a conversion basis, each AMC preferred stock unit represents one vote in the circumstances in which holders of preferred stock have the right to vote.

Additional AMC Preferred Stock Units

The Company may from time to time issue additional AMC Preferred Stock Units forming part of the same series of securities without the consent of the holders of the AMC Preferred Stock Units.

On August 4, 2022, we filed a Certificate of Designation (“Certificate of Designation”) with the Delaware Secretary of State designating 10,000,000 shares of our Authorized Preferred Stock as Series A Convertible Participating Preferred Stock.

The issuance of preferred stock, including Series A preferred stock, can have the effect of reducing the trading price of common stock, limiting the distribution of capital dividends and weakening the voting rights of common stock. ”

OK, is it clear now? AMC has granted you a preferred unit with one vote, but has also applied for the issuance of 10 million preferred shares (distinct from preferred units). Each AMC preferred stock has 100 votes. So 10 million times 100 is equivalent to 1 billion votes. It can also be converted into 1 billion shares of common stock. Each share of preferred stock is initially convertible into 100 shares of our common stock, subject to the terms and conditions described below. ” Take a look at what AMC CEO Adam Aron tweeted.

I think you have a pile of 100 vote preferred stock, so let’s be clear. If AMC advances 10 million priority designations and converts them, voting power and convertible dilution could be significantly diluted. The last time AMC wanted to issue additional shares, AMC Apes voted against it because it knew it would be dilutive. Now they don’t have the vote to stop it.

AMC stock price forecast

The confusion is likely to persist for some time and may not even be resolved. This is a smart move in my opinion, but it doesn’t help ordinary shareholders. AMC has piles of debt and deferred leases that need to be repaid in the next few years. You need money to pay for this. Funding is needed, but AMC Ape voted against the proposal. Now that they don’t have the power, AMC should be able to issue more diluted shares and raise more cash.

AMC chart, daily