Speaking during a conference call to discuss the results, CEO Aron said that AMC has the flexibility to issue more APEs in the future. This would also free AMC up to reinstate its quarterly dividend much sooner than it would have otherwise, Reese added. The dividend “should be opportunistically used to [reduce] total outstanding debt or otherwise,” wrote Benchmark analyst Mike Hickey, in a note released on Friday.
All holders of AMC stock as of the August 19th record date received one share of APE, with the first trade of AMC and APE on Monday August 22nd. While AMC pulled in nearly $1.2 billion in revenue during the quarter ended June 30, the company posted a net loss of $121.6 million, according to its second-quarter results Thursday. You must be a shareholder on or before the next ex-dividend date to receive the upcoming dividend. Securities and Exchange Commission (the “SEC”), copies of which may be obtained by visiting our Investor Relations website at investor.amctheatres.com or the SEC’s website at Will it squeeze much higher on its first trading day on August 22nd, 2022? I have no idea but will definitely hold my APE shares through the dividend record date to see what happens.
Typically, preferred equity has seniority over common equity with respect to dividends and in bankruptcy payouts. They had the same voting and economic rights as AMC common shares. In a stock split, the share count rises and the share price falls. A 2-for-1 split, for example, doubles the share count and halves the share price.
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Net loss improved to $121.6M vs. a net loss of $344M a year ago. Adjusted EBITDA swung to a gain of $106.7M, vs. a prior-year loss of $150.8M. Revenues jumped 162% from a pandemic-hit Q2 2021, but the $1.16B figure still trailed the pre-pandemic Q2 of 2019, when the company logged $1.5B.
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- Two key initiatives in the restructure are a reverse stock split and conversion of preferred equity into common stock.
- Roth Mkm and Citigroup both recently reiterated their sell ratings on the company, and Citigroup dropped its price target to $1.55.
- While AMC remains a cause célèbre for a vocal community of individual investors, the company’s financial health is a cause for concern, according to data from RapidRatings, a company that assesses the finances of public and private companies.
- AMC raised billions during the pandemic by selling new stock but ran out of shares to sell.
The special dividend of one APE unit per share of common stock should be paid at the close of business Aug. 19, with a record date of Aug. 15. That is, of course, until the idea of a preferred unit that is effectively equal to (and at some point in the future likely convertible into) a common share came along. “With the creation of APEs, AMC is deeply and fundamentally strengthening our company.
These effects cancel each other out, which is why the value of shareholders’ positions and the company’s market cap don’t change. Two key initiatives in the restructure are a reverse stock split and conversion of preferred equity into common stock. Read on to learn the details of these moves and whether they can keep AMC out of bankruptcy going forward.
Apex Clearing Corporation, our clearing firm, has additional insurance coverage in excess of the regular SIPC limits. This aspect of the dividend, by all accounts, is where the confusion and conspiracy theories come in. In simple terms, if you hold AMC shares as of the close on August 15, and hold those shares until the ex-dividend date, you will receive one APE share for each AMC share you hold. Shareholders should expect to receive their APE shares after markets close on Friday, August 19, with the company to begin trading on an ex-dividend basis August 22. AMC Entertainment appears to have found a creative solution to boost its share count and raise funds after investors balked at a proposal to issue more shares last year.
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Each share of Preferred Stock in turn is potentially convertible into one hundred (100) shares of Common Stock. AMC, which describes itself as the largest movie-theater company in the world, reported adjusted EBITDA of $106.7 million, compared to a loss of $150.8 million in the same period last year. The extra cash could be used to fund best stocks to buy fractional shares acquisitions of other theaters, pay down debt or even push into unrelated businesses, like AMC’s 2021 purchase of a large stake in a gold mining company. AMC Entertainment has embarked on a meme-friendly experiment to give a token reward to its retail investor base while also creating a backdoor way to raise more cash down the line.
An indication of interest to purchase securities involves no obligation or commitment of any kind. On September 6, AMC announced its intention to sell 40 million more common shares. The company will again use the proceeds to repay debt and improve its cash position. AMC announced on Aug 4, 2022, that it will pay dividends to all common ether trader stockholders in preferred stock. The company has applied to list this preferred entity on the New York Stock Exchange under the symbol “APE,” a nod to retail investors who helped save the world’s largest cinema chain from bankruptcy in early 2021. At first glance, this preferred stock distribution looks a lot like a stock split based.
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The company has faced unsubstantiated internet conspiracy theories that there are millions of synthetic AMC shares in circulation, as well as calls for a share recount, according to the Wall Street Journal. Because the APE units are preferred equity, there are different rights in a potential bankruptcy proceeding than the regular common stock. A document from AMC about the offering says that the APE dividend is not expected to be a taxable event for U.S. investors. However, investors who own partial shares of AMC may receive a small cash portion instead of fractional APE units, which could be taxable.
AMC announces special dividend in the form of ‘Ape’ preferred shares; stock falls
It’s an end run around the investors who voted against more shares. After giving about 500 million shares of APE to investors, AMC can sell 4.5 billion units to the broader market, The Wall Street Journal reports. «AMC still has an upside-down capital structure that has seen a 400% increase in shares outstanding since the start of the pandemic along with its sizable $5.4bn debt load,» MKM Partners analyst Eric Handler wrote in a note to clients on Aug. 5. «The creation of a Preferred Equity Units (APE) class of stock once again provides AMC with dry powder to issue new shares for investment purposes. … The key question though from here is will future share issuances prove accretive or dilutive.» AMC will be issuing an APE dividend for each of its almost 517 million shares outstanding, according to Chief Executive Adam Aron.
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AMC raising additional money through the APE units would not be a surprise on Wall Street. If you want to invest in AMC, consider keeping your position conservative-at least until there’s more clarity on the long-term effect of the Hollywood strike and AMC’s growth strategy. Acquisitions or expansion efforts could change the company’s outlook significantly, for better or worse. In February, a pension fund shareholder filed a class action lawsuit against AMC, claiming the company was staging an unfair voting process. The company has faced unsubstantiated internet conspiracy theories that there are millions of synthetic AMC shares in circulation, as well as calls for a share recount, according to a report in The Wall Street Journal.
Prior to that transaction, AMC had not split its stock, either positively or negatively, since it listed on the NYSE in 2013. With the lawsuit settled, AMC implemented the APE conversion on August 25, 2023. Consistent with AMC’s reverse split, each share of APE was converted into 0.1 shares of AMC. AMC Entertainment Holdings Inc. took Wall Street by surprise with the announcement of its “APE” special dividend after market close on Thursday.
The new class of shares carries the same voting rights as the existing common shares, the company said in a release. You may remember our friends at AMC, the theater turtle trading rules chain with the pantless CEO, who’ve leaned all the way in on the meme stock thing. Hordes of enthusiastic retail investors maybe rescued AMC from crushing debt.
Tastytrade, Inc. and tastylive, Inc. are separate but affiliated companies. If you’re confused — either by the slang, the securities terms, or Aron’s performative performance — that’s OK. Helpful articles on different dividend investing options and how to best save, invest, and spend your hard-earned money.
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Will AMC rise from debt-ridden meme stock to legitimate investment? Riley thinks that’s possible because AMC can now raise capital to fund expansion or acquisitions. U.S. Treasuries («T-Bill») investing services on the Public Platform are offered by Jiko Securities, Inc. (“JSI”), a registered broker-dealer and member of FINRA & SIPC. See JSI’s FINRA BrokerCheck and Form CRS for further information. When you enable T-Bill investing on the Public platform, you open a separate brokerage account with JSI (the «Treasury Account»). AMC and APE have both been trending lower since the distribution, with AMC trading around $8.25 and APE around $5.00.