AMC Stock Dives, APE Preferred Shares Rise on Stock Conversion Settlement
AMC Entertainment Holdings (AMC) revealed late Monday that it had reached a settlement that will allow it to move forward with plans to convert er AMC Entertainment preferred (APE) shares to ordinary shares. The news sent AMC shares tumbling and APE shares rising after hours.
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AMC Entertainment disclosed in its SEC filing a binding settlement with plaintiffs in the shareholder lawsuit regarding the movie theater chain’s stock conversion plan. Plaintiffs will receive common stock. In return, AMC and the plaintiffs will request that a “status quo order” be lifted, allowing for the conversion of APE shares into AMC shares.
AMC will also be allowed to conduct a 1-for-10 reverse stock split and have the right to sell more shares.
Lifting the status quo order still requires court approval.
AMC Entertainment issued the AMC Preferred as a way to raise more capital without directly issuing more AMC stock.
AMC shares plunged 22% to 3.98, near January’s two-year low. The APE share fell 22% to 1.81.
In theory, the APE share should be worth the same as the AMC share.
Follow Ed Carson on Twitter at @IBD_ECarson for stock exchange updates and more.
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