After investors rejected a plan to issue new shares last year, AMC Entertainment appears to have found a novel way to increase its share count and raise money.
AMC said on Thursday that it would distribute preferred shares as a dividend to all common shareholders. The firm has submitted an application to list these preferred stock units on the New York Stock Exchange with the ticker code “APE,” in honor of the small-time investors, sometimes known as “apes,” who helped save the biggest movie theater chain in the world from going bankrupt in early 2021.
AMC’s stock decreased by about 6% during Thursday’s extended trading.
“Today we are rewarding and recognizing our passionate and supportive shareholders, both to our shareholders in the U.S. and internationally,” CEO Adam Aron said in a statement. “Shareholders will receive one AMC Preferred Equity unit for each company issued share of AMC common stock that they own.”
These preferred equity units are sort of a loophole that allows AMC to sell more shares of stock as it works to rebuild its company following the pandemic. AMC will still have about 4.5 billion units left over after selling the 517 million APE units that it could sell to raise money.
1. In this important “Tweetstorm,” a dozen messages explain a bold step. In addition to releasing today our handsomely improving second quarter 2022 earnings, we also broke out the 3-D chess board and got creative. A big move that addresses so many of your asks. TODAY…WE…POUNCE
— Adam Aron (@CEOAdam) August 4, 2022