You may remember our friends at AMC, the movie theater chain with the CEO without pants, who have bowed all the way in in the stock of memes. Hordes of enthusiastic retail investors may have rescued AMC from crushing debt. Now AMC hopes to tap into them again to create more shares of the company.
This quarter, AMC announced a dividend for shareholders: units of AMC Preferred Equity, which will trade as APEs on the New York Stock Exchange. One of these babies will exist for every share of common stock and can be converted to common stock if the company and investors vote for that to happen.
However, that “if” is a bit sticky. See, AMC wanted to sell more stock and investors turned it down. Perhaps those investors didn’t want to be further diluted: AMC sold a lot of stock during the pandemic. Perhaps something else was at play. But APE, the solution, is not just a good marketing strategy to keep the attention of the retailer. It’s a final race around investors who voted against more action. After delivering about 500 million shares of APE to investors, AMC can sell 4.5 billion units to the broader market, The Wall Street Journal reports.
The news was released after the market. AMC shares closed at $18.66 today, and after market shares fell nearly 8 percent to $17.16 at 5 p.m. ET, suggesting investors aren’t exactly thrilled about the plan. . Or maybe they just didn’t like the company’s earnings numbers, also released today: AMC’s revenue hasn’t recovered from the pandemic.
Correction 6:44 p.m. ET: Corrects the number of APE shares that will be delivered to current AMC investors. We are sorry for the mistake.