AMC Entertainment Stock Plunges As Its APE Securities Debut On NYSE
22.08.2022 - 19:57
/ deadline.com
AMC Entertainment’s new APE securities — AMC Preferred Equity Units – began trading today late morning in a messy session for the big exhibitor, whose primary stock is down by almost 40%.
APES were being distributed to AMC shareholders via their brokers starting this morning. Shareholders are getting one APE for each share of common stock they own. APES — which will have the same economic value and voting rights as common stock — opened at $6.95. A report said the security was halted briefly after trading up to $9.49. It popped to over $10 but is currently changing hands at $7.37.
AMC had tried to prepare investors in an explanatory note, and tweet today by CEO Adam Aron. “An investor should … expect that the price of a stand-alone share of common stock logically should at least initially decline, however that investor’s economic interest will be the sum of the price of a share of common stock plus the price of an APE,” AMC said.
IMPORTANT! Remember that with the APE already having had its first NYSE trade today, the value now of your AMC holdings consists of the prices of your AMC shares and your new APE units COMBINED. Add together an AMC share plus a new APE unit, compared to just an AMC share before. pic.twitter.com/zfbo0yXCDp
— Adam Aron (@CEOAdam) August 22, 2022
Aron, when announcing the APES earlier this month, described them as a kind of special dividend, a gift to AMC stockholders. (Apes are also slang for amateur investors, who piled into AMC in 2021.)
The company is issuing 517 million APEs today and the board has authorized issuance of up to one billion of the securities. APES are good for the company in that AMC now has a new currency it can uses to 1) strengthen its balance sheet, including reducing debt and
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