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The APE conversion comes one day after AMC completed a reverse stock split.
Scott Olson/Getty Images
AMC Entertainment Holdings
will convert its preferred equity units to common stock during Friday morning’s opening bell, a move traders have been anticipating all week.
AMC
(ticker: AMC) debuted its AMC preferred units, or APEs, last year on the New York Stock Exchange in an attempt to raise money to pay off company debts. The move came after the movie theater chain in 2021 lacked enough votes to approve the sale of additional stock to raise capital.
Before the market opened Thursday, AMC completed a 10-for-1 reverse stock split ahead of Thursday’s so as to reduce the number of AMC shares outstanding, which will allow the company to issue more shares down the line. Because of the split, every one APE unit a trader has will convert to 1/10 of one share of AMC on Friday.
But the fun doesn’t stop there. AMC will issue common stock as a litigation settlement payment between AMC and some shareholders. The company will provide extra stock to investors who held common shares on Aug. 24, to settle legal claims related to the APE conversion plan. AMC’s initial move to convert APE units to common stock had been held up because the settlement needed Delaware Chancery Court approval.
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