August 14, 2022

AMC CEO Announced On August 4th That The Company Is Giving Shareholders A Special Dividend Of AMC Preferred Equity Units That Will Trade On The NYSE Under The Ticker “APE” Starting Aug. 22

Barron's Magazine, published by Dow Jones & Company, a division of News Corp
written by Connor Smith
Thursday August 4, 2022

AMC Entertainment is finally giving the “apes” what they want. The movie-theater company paired its second-quarter earnings report with news that it’s giving shareholders a special dividend of AMC Preferred Equity Units.

The AMC preferred shares will trade on the New York Stock Exchange under the ticker “APE” starting Aug. 22. AMC (ticker: AMC) said it would issue 516.82 million APE shares—one for every share of common stock outstanding. The preferred shares would be convertible to common shares, but only if AMC shareholders vote to increase the number of authorized shares of common stock. AMC last year pulled a request to shareholders to increase its potential share count, citing a lack of support among investors.

The Wall Street Journal, citing a person familiar with the matter, reported that the preferred equity units would enable the company to work around constraints placed on selling common shares. The firm could sell an additional 4.5 billion APE units after handing out the initial 517 million, the Journal notes. AMC struggled amid pandemic, selling millions of shares in 2021 to help stay afloat while theaters remained shut down.

The special dividend will go to shareholders of record on Aug. 15, and be paid on the close of business on Aug. 19. The ex-dividend date is Aug. 22. If you sell your AMC shares between Aug. 16 and Aug. 22, the person you sold to is entitled to the preferred shares, though AMC suggests investors trading during this period consult their broker.

A share or non-fungible token dividend has been a popular request among some AMC shareholders on sites like Twitter and Reddit. Such users, who call themselves “apes” often spread conspiracy theories about fake AMC and GameStop shares. The Journal, citing the person familiar, reported that the company hopes the dividend, which will be given to legitimate shareholders, will put such theories about fake shares to rest. Shareholders on AMC’s investor connect site will also receive an NFT.

An AMC spokesman didn’t return a request seeking comment on the Journal report.

AMC CEO Adam Aron, in the announcement, called the preferred dividend exclusively to shareholders “perhaps the single biggest action we will take in all of 2022 to fundamentally strengthen AMC for the long term.”

“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,” Aron said. “As a result, this dramatically lessens any near-term survival risk for AMC, as we continue to work our way through this pandemic.”

AMC also reported a second-quarter net loss of $121.6 million, or 24 cents a share on revenue of $1.2 billion. Analysts were expecting sales of $1.17 billion, according to FactSet. The firm’s non-GAAP net loss was 20 cents a share and topped consensus estimates for an adjusted loss of 23 cents a share, according to FactSet. Aron noted its investment in Nevada gold and silver miner Hycroft Mining (HYCM) led to write-downs. Hycroft shares fell more than 48% during the quarter.

Aron noted AMC’s global attendance hit 59 million people, up 168% from the second quarter of 2021. He also said food and beverage revenue per patron was $7.52, up from $5.58 in the comparable prepandemic quarter of 2019.

AMC stock was down 4.9% in after hours trading.

UPDATE 8/14/22 at 6:17pm: Added info below.
click picture to enlarge for you to read pertinent info.
written by Frank Nez
Saturday August 13, 2022

AMC shareholders are wondering how much APE stock will be worth.

The dividend was announced during AMC’s 2022 Q2 earnings call and has received a lot of attention.

But there seems to be a lot of misinformation going around regarding the dividend, as well as some hard truths.

In this article I’m going to break down how much APE stock will be worth and what shareholders can expect in the coming weeks for AMC.

Let’s get started!

Who will receive APE Stock?

AMC shareholders will receive 1 APE stock for every 1 share of AMC they hold at the end of the trading day of August 15th, per AMC’s press release.

Shareholders should see the new dividend stock reflect in their broker accounts the following week by Monday the 22nd.

APE stock is not a cash dividend which means shareholders will be able to trade the security like any other stock.

“These 516,820,595 new “AMC Preferred Equity units” will trade on the New York Stock Exchange with the symbol APE”, said CEO Adam Aron in a tweet earlier this month.

Shareholders who sell AMC stock prior to the closeout date will not receive APE stock upon the issue date.

Will APE expose synthetic shares?

There is a 50/50 chance APE stock will expose synthetic shares.

The reason being is that AMC Entertainment has already issued the 516.8 million equity units per outstanding AMC shares.

This means that the equity units already belong to every individual shareholder.

The problem will arise only when AMC shareholders do not receive APE stock.

If AMC shareholders only receive partial APE securities, then brokers will need to address the issue at hand.

The preferred equity dividend will go ONLY to company issued shares so if there are institutions holding synthetic shares, they will simply not receive APE.

How much will APE Stock be worth?

APE stock will be worth approximately 50% of where AMC shares traded just before the dividend.

From there, market trading conditions will determine the ongoing share price of APE stock.

This means that if AMC traded at $25 per share before the dividend goes into effect, shareholders will see both AMC and APE stock reflect $12.50 per share each.

The value of AMC shareholders’ portfolios will not change but rather be divided in half by these two securities.

In other words, the value will be the sum of 1 AMC share plus 1 APE.

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