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AMC Entertainment fell precipitously ahead of its planned stock shift.
Ethan Miller/Getty Images
AMC Entertainment Holdings
The stock fell on Monday ahead of the long-awaited conversion of preferred stock units into common shares.
According to a report with the Securities and Exchange Commission last week,
AMC Entertainment
(stock ticker: AMC) said Thursday, August 24, will be the last day for trading in AMC Preferred Equity Units, also known as APES. The APE units will not be traded on August 25, and will instead be converted into common shares and result in one class of AMC common stock trading.
APE’s movie theater units will begin trading in 2022 on the New York Stock Exchange to help the company raise capital to help pay down its debt.
AMC also plans a reverse 1-for-10 split of its regular stock on Thursday.
Shares of AMC fell 24% Monday to $3.12, their lowest close since January 2021, according to Dow Jones Market data. The stock is now down 23% this year.
AMC needed approval from the Delaware Court of Chancery to convert the APE units into regular stock, which it formally received.
Riley Securities analyst Eric Wold wrote in a research note Monday that investors have been focusing on “dilution that could come from potential stock offerings after the deal.”
However, AMC shares rose about 20% last week. Wold said he believes the stock move “could indicate that investors are starting to look beyond any potential near-term relief and instead focus on the company’s opportunity to take advantage of access to increased equity to physically reduce debt and strategically expand further- Growth segments through acquisitions.
Write to Angela Palumbo at angela.palumbo@dowjones.com