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• AMC is planning to list about 517 million preferred shares on NYSE under the symbol ‘APE’
AMC Entertainment Holdings Inc (NYSE: AMC) on Thursday said the theater chain would pay a special dividend in the form of preferred shares after posting a bigger-than-expected loss.
Shares of the once popular meme stock fell 10% after the market closed on Thursday as the move raised concerns of a possible equity dilution after the company proposed to convert its preferred shares to common stock and asked for investors’ approval.
AMC will give one preferred share for every AMC common stock held and said the theater chain is planning to list about 517 million preferred shares on the New York Stock Exchange under the symbol “APE”.
“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,” Chief Executive Adam Aron said.
AMC’s market value had skyrocketed last year in a retail investor-driven rally, helping it raise billions of dollars in equity capital even at the cost of investor concern of erosion in the value of its stock.
During the peak of the coronavirus pandemic, AMC faced heavy losses as lockdowns forced theaters to shut.
The latest announcement coincides with a 162% surge in revenue in the second quarter as the easing pandemic brought back movie-goers to cinema halls.
Quarterly revenue rose to $1.17 billion, edging past the Wall Street estimate of $1.16 billion, while the company reported a net loss of 24 cents per share, which was more significant than the market expectation of 21 cents.
Picture Credit: Forbes
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