AMC to issue preferred stock under the ticker symbol ‘APE’

what is ape stock

Acquisitions or expansion efforts could change the company’s outlook significantly, for better or worse. Will AMC rise from debt-ridden meme stock to legitimate investment? Upgrade to MarketBeat All Access to add more stocks to your watchlist. Sign-up to receive the latest news and ratings for AMC Entertainment and its competitors with MarketBeat’s FREE daily newsletter. 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. Alicia Reese of Wedbush also sees upside, though not as much.

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AMC can sell more in order to raise cash or pay down some of its $10 billion in debt and long-term liabilities. Banking services and bank accounts are offered by Jiko Bank, a division of Mid-Central National Bank.JSI and Jiko Bank are not affiliated with Public Holdings, Inc. (“Public”) or any of its subsidiaries. None of these entities provide legal, tax, or accounting advice.

  1. The value of T-bills fluctuate and investors may receive more or less than their original investments if sold prior to maturity.
  2. The transaction doesn’t change the company’s value or the value of shareholder positions.
  3. The APEs have the same voting power and right to a dividend as AMC common shares.
  4. AMC on Thursday said it plans to issue a dividend to all common shareholders in the form of preferred shares.
  5. The real question is why did AMC pay this special dividend in particular and how does it actually function in relation to AMC Entertainment stock.

Antara also accepted 91 million APE units as payment for $100 million of AMC’s outstanding debt. AMC Entertainment (AMC) has dominated financial headlines for weeks and the good folks of Reddit aren’t to blame. The movie theater company is working through a complex plan to improve its balance sheet and reduce its interest expense burden. Aron wrote in a tweet the company’s new APE units will allow it to “raise capital, pay debt,” and more. That could potentially be enough to keep it afloat while competitors tease bankruptcy.

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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. High-Yield Cash Account.A High-Yield Cash Account is a secondary brokerage account with Public Investing. Funds in your High-Yield Cash Account are automatically deposited into partner banks (“Partner Banks”), where that cash earns interest and is eligible for FDIC insurance. Your Annual Percentage Yield is variable and may change at the discretion of the Partner Banks or Public Investing.

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In short, AMC remains a speculative bet that holds a lot of risks. The company is stretching its efforts to last in a troubled industry, which could be to its advantage in the long run. However, retail investors still remain at risk during the process.

what is ape stock

The nature of the preferred shares should lead them to trade similar to AMC common stock but the real mover for the moment appears to be how much it is discussed on Reddit. The special dividend acts similar to a 2-for-1 stock-split where instead of receiving two AMC shares for each  share held, investors received one APE share and retained their previous AMC share. On the day of issuance AMC stock fell 42% but adjusting for the value of APE units issued left the shares down “just” 5.5% for the day.

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The company expects to pay a dividend of about 517 million APE units later this month. The new class of shares has the same voting rights as existing common stock, the company said in a statement. AMC announced on Aug 4, 2022, that it will pay dividends to all common stockholders in preferred stock.

what is ape stock

In what can be considered bad timing, AMC released its preferred stock class, called APE units, on Aug. 22. Some investors received APE units in the form of a dividend payout prior to the preferred class actually beginning to trade. Now, the class has officially begun trading, but it won’t be seeing immediate success due to the stock’s current volatility. For AMC Entertainment (AMC), the release of its new preferred stock class called APE units has come at a bad time. Competitor Regal Cinemas announced a potential bankruptcy, which caused hysteria in the movie theater industry.

Meet APE Stock – AMC’s dividend to all common shareholders

In August 2022, AMC issued 517 million shares and distributed them for free to AMC shareholders. Each shareholder received one APE share for every one AMC share they owned. The move was intended to rally support from AMC’s meme investor base. Stock splits and reverse stock splits redistribute a company’s value across a greater or fewer number of shares. CEO Adam Aron has already tried multiple  strategies to appeal to these investors that might not actually care much for the underlying company but want to profit off the extreme market sentiment surrounding it. Releasing the APEs not only references how some of these investors refer to themselves, but also allows the firm to bypass the need to increase the number of common shares.

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The APE conversion is AMC’s move to convert its preferred equity shares into AMC common stock. The transaction doesn’t change the company’s value or the value of shareholder positions. The special dividend is a clear effort from the theater company to appeal to retail investors who spend most of their time on r/wallstreetbets and playing Call of Duty. The real question is why did AMC pay this special dividend in particular and how does it actually function in relation to AMC Entertainment stock.

Roth Mkm and Citigroup both recently reiterated their sell ratings on the company, and Citigroup dropped its price target to $1.55. Riley thinks that’s possible because AMC can now raise capital to fund expansion or acquisitions. The bulls argue that AMC’s capital restructuring moves have improved the company’s fundamentals and set the stage for growth. They also cite improving industry conditions, touting the summer box-office success of Barbie and Oppenheimer. In February, a pension fund shareholder filed a class action lawsuit against AMC, claiming the company was staging an unfair voting process. 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.

Both common and preferred shareholders would weigh in equally on the two initiatives, which were bundled into one vote. Since the preferred shares grossly outnumbered the common shares, the vote would go in the direction that favored preferred shareholders—and specifically, Antara Capital. Rather than battle with shareholders over a dilutive AMC stock issue, the company created the APE unit with authorization for 1 billion shares.

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