AMC Entertainment’s shares declined by 35% in premarket trading on Monday due to concerns that the approval of a revised stockholder settlement will enable the company to issue more shares in order to raise capital. This move would result in the dilution of the value of each common share.
The common shares fell to $3.45 in trading before the market opened. On the other hand, the preferred stock units known as “APE”, which are traded at a significant discount compared to common shares, increased by 27.5% to $2.27.
As part of the settlement, AMC will offer stock valued at approximately $129 million to common shareholders in order to resolve potential legal claims related to a stock conversion plan.
This approval comes just three weeks after the judge rejected a previous version of the settlement.
This ruling clears the path for the company to proceed with its plan, which was announced in March and includes converting preferred share units into common stock, implementing a one-for-ten reverse share split, and potentially issuing more shares as it aims to reduce its $5.1 billion debt.
According to Wedbush analysts…
2023-08-14 06:49:19
Link from finance.yahoo.com