The stock was up as much as 5.5% immediately after the results, but the new equity, issued via a special dividend to shareholders, raised some worries about dilution. You may remember our friends at AMC, the theater chain with the pantless CEO, who’ve leaned all the way in on the meme stock thing. Hordes of enthusiastic retail investors maybe rescued AMC from crushing debt.

At first glance, this preferred stock distribution looks a lot like a stock split based. This is based on the OCC Settlement Notice, which indicated a 95%/5% split of AMC/APE shares for the settlement of the current open options. In this case, AMC will be issuing 1 share of APE preferred equity for every 1 share of AMC. Traditionally, a stock will split shares to add liquidity, reduce volatility, and to reduce the notional value of one share of stock by issuing more shares of stock.

  1. You should consult your legal, tax, or financial advisors before making any financial decisions.
  2. AMC will be issuing an APE dividend for each of its 516,820,595 shares outstanding, according to Aron.
  3. AMC’s second-quarter sales were $1.166 billion, compared with $444.7 million in the same period last year.
  4. For more than a million years during the Pleistocene, Gigantopithecus roamed southern China.

Two key initiatives in the restructure are a reverse stock split and conversion of preferred equity into common stock. Read on to learn the details of these moves and whether they can keep AMC out of bankruptcy going forward. The special dividend is a clear effort from the theater company to appeal to retail investors who spend most https://forex-review.net/ of their time on r/wallstreetbets and playing Call of Duty. The real question is why did AMC pay this special dividend in particular and how does it actually function in relation to AMC Entertainment stock. AMC Entertainment (AMC) has fully embraced its meme popularity with the release of a special dividend called “APE” units.

Will I get APE stock for my AMC holdings?

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While AMC pulled in nearly $1.2 billion in revenue during the quarter ended June 30, the company posted a net loss of $121.6 million, according to its second-quarter results Thursday. AMC, which describes itself as the largest movie-theater company in the world, reported adjusted EBITDA of $106.7 million, compared to a loss of $150.8 million in the same period last year. Will AMC rise from debt-ridden meme stock to legitimate investment? Going forward the APE units are not linked to AMC shares and can thus be bought and sold separately. Investors can choose to invest in AMC and/or APE shares and the two have already exhibited different trading patterns.

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Each shareholder received one APE share for every one AMC share they owned. The move was intended to rally support from AMC’s meme investor base. Theoretically, the shares should converge and trade at roughly the same price as APE units are convertible into AMC stock on a one-to-one basis. Additionally, APE units are preferred equity meaning they shakepay review would be paid out first in a potential AMC bankruptcy. If anything APE units should be sold at a premium over AMC shares which is not the case currently as APE hovers around $6.60 and AMC trades around $9.35. AMC issued a special preferred shares dividend to shareholders called APE and this article will explain everything you need to know.

AMC announces special dividend in the form of ‘Ape’ preferred shares; stock falls

Nevertheless, the very great ape’s teeth, which are encased in a thick layer of enamel, preserve a wealth of clues to how these enigmatic primates lived and potentially why they died out. Unlike present-day climate change, which is driven by carbon emissions from burning fossil fuels, the changing climate of 700,000 years ago was due to phenomena such as the shape of Earth’s path as it orbited the Sun. Giganto first caught the attention of Western science in the 1930s, when a palaeontologist found massive molars, some more than 2 centimetres across, being sold as “dragon teeth” in Chinese apothecaries.

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Investments in T-bills involve a variety of risks, including credit risk, interest rate risk, and liquidity risk. As a general rule, the price of a T-bills moves inversely to changes in interest rates. Although T-bills are considered safer than many other financial instruments, you could lose all or a part of your investment. Typically, preferred equity has seniority over common equity with respect to dividends and in bankruptcy payouts. They had the same voting and economic rights as AMC common shares. The special dividend of one APE unit per share of common stock should be paid at the close of business Aug. 19, with a record date of Aug. 15.

Potential dilution

Your Annual Percentage Yield is variable and may change at the discretion of the Partner Banks or Public Investing. Apex Clearing and Public Investing receive administrative fees for operating this program, which reduce the amount of interest paid on swept cash. AMC Entertainment appears to have found a creative solution to increase its share count and raise funds after investors abandoned proposals to issue more shares last year. Although these moves were part of AMC’s plan to avoid bankruptcy, investors have not responded well. AMC was trading in the $2 range before the split and went to about $16 just after the split.

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“With the creation of APEs, AMC is deeply and fundamentally strengthening our company. We already have shareholder approval in hand such that our board can decide we can issue more APEs in the future above and beyond those going out with this initial dividend. What it really comes down to, is that the preferred share issuance is really a bet by management on retail investors not having the ability to understand that the APE shares are effectively dilution.

APE shares don’t come out of nowhere but take 50% of the value away from AMC stock. APE stands for AMC Preferred Equity Shares and will be paid to all AMC shareholders on record as of August 15, 2022. That means you must own AMC shares before Friday, August 12th 2022.

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He’s pretty extra there too; Aron tried to get #TodayWePounce trending last night. AMC Entertainment announced earnings on August 4th with a loss of (0.20) EPS in the second quarter of 2022, a surprise “beat” on the streets (0.22) expectation. What followed on the earnings call was arguably more surprising – CEO Adam Aron announced the distribution of a preferred stock dividend, APE, for all AMC stockholders. This aspect of the dividend, by all accounts, is where the confusion and conspiracy theories come in.

The AMC Entertainment Holdings Preferred Equity Units (APE) were dividended at the end of last week to AMC shareholders and have already risen nearly 10% from their $6 opening price. AMC CEO Adam Aaron tweeted that the APE dividend was issued mainly to reward loyal shareholders with an NFT-like gift and expose naked short sellers who bet against the stock. AMC raised billions during the pandemic by selling new stock but ran out of shares to sell. Investors, fearing dilution, rejected the company’s efforts to issue additional stock. Just look at all the retail investors deriding Jim Chanos, whom attempted to educate them on what this preferred equity unit really means. In simple terms, if you hold AMC shares as of the close on August 15, and hold those shares until the ex-dividend date, you will receive one APE share for each AMC share you hold.