AMC Shares Fall 42% as APE Units Start Trading

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AMC Shares Fall 42% as APE Units Start Trading

AMC (AMC) shares plunged 42% yesterday when trading of its newAPE preferred shares commenced, while big movie operator Cineworld warned of probable insolvency.

AMC’s APE units were released to investors as a special dividend yesterday. According to the firm, investors will get one APE share for each share of Class A AMC stock they possess, essentially doubling the number of shares outstanding and operating as a 2-for-1 stock split. According to AMC CEO Adam Aron, the value of their investment in AMC is the combination of AMC shares and the new APE units.

The action may enable the corporation to raise further funds and lower its debt in the future. The capital might potentially be used for mergers and acquisitions, according to the company’s CEO.

“The main test for AMC will be whether or not the corporation attempts to convert the new APE shares to common stock. AMC shareholders have already opposed fresh share offers owing to dilution concerns, and they are likely to oppose this conversion if AMC’s management recommends it “Caleb Silver, Investopedia’s Editor-in-Chief, said

Cineworld Bankrupty Warning

Cineworld, which owns Regal Cinemas, said Monday that it was contemplating bankruptcy, adding to industry concerns. Cineworld issued a liquidity warning last week, predicting that a gradual rebound in cinema attendance due to pandemic lockdowns and a dearth of blockbuster movies would endure until November. Shares of Cineworld plummeted by more than 33%.

This led AMC CEO Adam Aron to issue a statement stating that the studio is hopeful about the next slate of films and that “we remain positive about AMC’s future.”

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