AMC Entertainment Plans ‘APE’ Preferred Stock Dividend. Shares Slide After Earnings.
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Investors will receive one preferred share for each common share they hold.
Jeenah Moon/Bloomberg
AMC Entertainment
finally give monkeys” what they want. The movie company linked its second-quarter earnings report to news that it was offering shareholders a special dividend of AMC preferred stock units.
The AMC preferred shares will trade on the New York Stock Exchange under the symbol “APE” beginning August 22. AMC (symbol: AMC) announced that it would issue 516.82 million shares of APE, one for each common share outstanding. The preferred shares would be convertible into common stock, but only if AMC shareholders vote to increase the number of common shares authorized. AMC last year asked shareholders to increase its potential number of shares, citing a lack of support among investors.
The Wall Street Journal, quoting a person familiar with the matter, indicated that the preferred share units would allow the company to circumvent the constraints imposed on the sale of common shares. The company could sell an additional 4.5 billion APE units after distributing the initial 517 million, the Journal notes. AMC struggled amid the pandemic, sell millions of shares in 2021 to help stay afloat while cinemas remained closed.
The special dividend will go to shareholders of record on August 15 and will be paid at the close of business on August 19. The ex-dividend date is August 22. If you sell your AMC shares between August 16 and August 1. 22, the person you sold to is entitled to the preferred stock, although AMC suggests investors trading during this period consult their broker.
A symbolic non-fungible stock or dividend has been a popular request among some AMC shareholders on sites like Twitter and Reddit. These users, who call themselves “monkeys”, often spread conspiracy theories about fake AMCs and
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shares. The Journal, quoting the person familiar, reported that the company hopes the dividend, which will be paid to legitimate shareholders, will put an end to these fake stock theories. Shareholders on AMC’s Investor Connect site will also receive an NFT.
A CMA spokesperson did not return a request for comment on the Journal’s report.
AMC CEO Adam Aron, in the announcement, called the preferred dividend exclusively for shareholders “perhaps the biggest action we will take in 2022 to fundamentally strengthen AMC for the long term.”
“This new AMC Preferred Equity gives AMC currency that can be used in the future to strengthen our balance sheet, including paying down debt or raising new capital,” Aron said. “As a result, this significantly reduces any short-term survival risk for AMC as we continue to navigate our way through this pandemic.”
AMC also reported a net loss of $121.6 million in the second quarter, or 24 cents per share on revenue of $1.2 billion. Analysts had expected sales of $1.17 billion, according to FactSet. The company’s non-GAAP net loss was 20 cents per share and beat consensus estimates for an adjusted loss of 23 cents per share, according to FactSet. Aron noted that his investment in Nevada gold and silver mining company Hycroft Mining (HYCM) resulted in writedowns. Shares of Hycroft fell more than 48% in the quarter.
Aron noted that AMC’s global attendance reached 59 million, up 168% from the second quarter of 2021. He also said food and beverage revenue per customer was 7.52 $, compared to $5.58 in the comparable pre-pandemic quarter of 2019.
AMC stock was down 4.9% after hours trading.
Write to Connor Smith at connor.smith@barrons.com
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