Despite having new fundraising options in the wake of a judge’s ruling on Friday, AMC Entertainment started the week on a jarring note as its stock price skidded to its lowest level since January 2021.
The shares plummeted 35% on more than five times their normal trading volume, closing at $3.40. Investors pounced after a Delaware Chancery Court judge approved a settlement with shareholders and ruled that the company can convert its “APE” (AMC Preferred Equity) shares into common shares.
A group of retail investors (individuals now comprise the majority of AMC’s investor base) had filed suit seeking to block the APE-to-equity conversion and a corresponding 1-for-10 reverse stock split, citing concerns about dilution.
The corporate maneuvers are designed to provide much-needed liquidity so that AMC can avoid the fate of top peers like Regal Cinemas parent Cineworld, which just emerged from a bankruptcy process.
Read more on deadline.com
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