AMC Entertainment’s share price rises again following the news of the APE special dividend

The national box office is set to enter a two-month funk due to a lack of trending merchandise, but AMC Entertainment’s stock continues to drag the truck.

After the news on Thursday that the world’s number one exhibitor was offering APE investors an AMC preferred stock for every AMC common class share, AMC’s share price rose 31% on Friday, from $ 16.97 at $ 22.18. This morning, they rallied 14% again, opening at $ 24.06 and reaching a high of $ 27.50. At the time of this publication, AMC stock was trading at $ 25.02.

The preferred stock will be issued to AMC common shareholders on the ex dividend date of August 19 and will be listed on the New York Stock Exchange under the symbol APE.

While there was a perception that retail investors were reluctant to sell more shares, APE’s involvement in the AMC deal will give the exhibitor greater financial flexibility. The new preferred stock is similar to owning other stock and the AMC will be able to trade and potentially repay the debt.

“Although nobody’s crystal ball can accurately predict the fluctuations or volatility of the stock market, the economic interest our shareholders will have in both stocks and shares.
The APEs will be in a company that we believe is much stronger than AMC now prior to making this announcement, ”AMC CEO Adam Aron said Thursday during the second quarter earnings call.

“By creating APE, AMC is deeply and fundamentally strengthening our company. We already have shareholder approval for our board of directors to decide that they can issue more APEs in the future, in addition to those issued for this initial dividend. Given the flexibility it will give us to issue more EPAs, we believe we will be able to raise funds if we wish, significantly reducing any survival risk as we continue to work through this pandemic to rebuild and transform ourselves. Instead of thinking about survival, the flexibility of EPAs can allow us to continue our efforts to try to keep AMC thriving and growing, ”Aron added.

On Thursday he added: “I behave and think like a shareholder because I am a shareholder and moreover a great one. At the current AMC share price, I now own AMC shares worth approximately $ 15 million, and this includes my previously granted but unassigned shares, assuming they are eg. It’s pretty obvious, but it’s a huge incentive for me to do the right thing for all of our stakeholders. “

AMC’s second quarter sales increased on the back of a successful summer Top Gun: Maverick $ 1.16 billion compared to $ 444.7 million in the same quarter last year. Net exhibitor loss in the second quarter of 2021 decreased from $ 344 million to $ 121.6 million.