AMC Entertainment Plans ‘APE’ Preferred Stock Dividend. Shares Slide After Earnings.

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Investors will receive a preferred share for each share of common stock they own.

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Jeenah Moon/Bloomberg

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AMC Entertainment is finally giving the “apes” what they want. The movie-theater company paired its second-quarter earnings report with news that it’s giving shareholders a special dividend of AMC Preferred Equity Units.

The AMC preferred shares will trade on the New York Stock Exchange under the ticker “APE” starting Aug. 22. AMC (ticker: AMC) said it would issue 516.82 million APE shares—one for every share of common stock outstanding. The preferred shares would be convertible to common shares, but only if AMC shareholders vote to increase the number of authorized shares of common stock. AMC last year pulled a request to shareholders to increase its potential share count, citing a lack of support among investors.

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The Wall Street Journal, sitting a person familiar with the matter, reported that the preferred equity units would enable the company to work around constraints placed on selling common shares. The firm could sell an additional 4.5 billion APE units after handing out the initial 517 million, the Journal notes. AMC struggled amid pandemic, selling millions of shares in 2021 to help stay afloat while theaters remained shut down.

The special dividend will go to shareholders of record on Aug. 15, and be paid on the close of business on Aug. 19. The ex-dividend date is Aug. 22. If you sell your AMC shares between Aug. 16 and Aug. 22, the person you sold to is entitled to the preferred shares, though AMC suggests investors trading during this period consult their broker.

A share or non-fungible token dividend has been a popular request among some AMC shareholders on sites like Twitter and Reddit. Such users, who call themselves “apes” often spread conspiracy theories about fake AMC and GameStop shares. The Journal, citing the person familiar, reported that the company hopes the dividend, which will be given to legitimate shareholders, will put such theories about fake shares to rest. Shareholders on AMC’s investor connect site will also receive an NFT.

An AMC did not return a request seeking comment on the Journal report.

AMC CEO Adam Aron, in the announcement, called the preferred dividend exclusively to shareholders “perhaps the single biggest action we will take in all of 2022 to fundamentally strengthen AMC for the long term.”

“This new AMC Preferred Equity gives AMC a currency that can be used in the future to strengthen our balance sheet, including by paying down debt or raising fresh equity,” Aron said. “As a result, this dramatically lessens any near-term survival risk for AMC, as we continue to work our way through this pandemic.”

AMC also reported a second-quarter net loss of $121.6 million, or 24 cents a share on revenue of $1.2 billion. Analysts were expecting sales of $1.17 billion, according to FactSet. The firm’s non-GAAP net loss was 20 cents a share and topped consensus estimates for an adjusted loss of 23 cents a share, according to FactSet. Aron noted its investment in Nevada gold and silver miner Hycroft Mining (HYCM) led to write-downs. Hycroft shares fell more than 48% during the quarter.

Aron noted AMC’s global attendance hit 59 million people, up 168% from the second quarter of 2021. He also said food and beverage revenue per patron was $7.52, up from $5.58 in the comparable prependemic quarter of 2019.

AMC stock was down 4.9% in after hours trading.

Write to Connor Smith at [email protected]

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Credit: www.marketwatch.com /

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