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AMC Entertainment Holdings Inc (NYSE: AMC) tumbled more than 40% on Monday after a rival warned of potential bankruptcy, spooked investors on the same day the cinema chain’s preferred stock listing began trading.
The drop comes as rival Uk-based Cineworld Group PLC, the owner of Regal Cinemas, on Monday it is considering filing bankruptcy.
Shares of AMC fell 40.3% to $10.76 in New York.
The AMC’s preferred stock, which started trading on Monday under the ticker “APE”, opened at $6.95 on the New York Stock Exchange but also dropped more than 12% in afternoon trading.
The preferred share surged to $10.50 in the early morning.
The shares, intended as a dividend, will have the same voting rights as common stock and could be used for raising capital in the future, the company said.
Trading of both classes of shares was halted multiple times in volatile trading.
Retail favorite AMC on Friday reiterated a “relatively weak” film slate in the third quarter of 2022.
The COVID-19 lockdowns severely impacted the cinema chains.
However, AMC managed to raise $1.8 billion in 2021, capitalizing on the rally triggered by retail investors’ interest in meme stocks.
AMC shares have jumped over 150% since the end of 2019, whereas Cineworld lost about 99% of its share value in the same period.
Picture Credit: Deadline
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