Stock Takes A Dive After AMC Entertainment Unveils APE Securities
By Movieguide® Staff
AMC Entertainment stock dropped nearly 40% as the company’s new APE securities—AMC Preferred Equity Units—began trading.
According to Deadline, each shareholder will receive one APES for each share of AMC stock.
AMC CEO Adam Aron released a tweet explaining the lower numbers and how APES will affect current shareholders in the future: “An investor should … expect that the price of a stand-alone share of common stock logically should at least initially decline, however that investor’s economic interest will be the sum of the price of a share of common stock plus the price of an APE.”
The company distributed 517 million APEs to its shareholders. It should work in AMC’s favor as it provides more to sell in an uncertain time for movie theaters, Deadline reported.
“IMPORTANT! Remember that with the APE already having had its first NYSE trade today, the value now of your AMC holdings consists of the prices of your AMC shares and your new APE units COMBINED. Add together an AMC share plus a new APE unit, compared to just an AMC share before,” Aron wrote in a separate tweet.
IMPORTANT! Remember that with the APE already having had its first NYSE trade today, the value now of your AMC holdings consists of the prices of your AMC shares and your new APE units COMBINED. Add together an AMC share plus a new APE unit, compared to just an AMC share before. pic.twitter.com/zfbo0yXCDp
— Adam Aron (@CEOAdam) August 22, 2022
APES also “immensely lessens any survival risk as we continue to work our way through the impact of the COVID pandemic towards recovery and transformation,” AMC notes.
APES could offer some assurance to AMC, as exhibitors worry over the lack of blockbuster movies to close out the summer.
Movieguide® previously reported:
Despite a solid start to the summer box office, thanks to blockbusters like TOP GUN: MAVERICK, MINIONS: RISE OF GRU, and ELVIS.
According to Comscore, the summer box office has grossed $3.027 billion, which is only 17.5% below the last pre-pandemic numbers in 2019.
Although the numbers encouraged theater owners who struggled to stay afloat amid COVID-19 shutdowns, some expect a slow decline without the prospect of more blockbusters.
“As great as the summer has been, we’re about to hit a lull,” Chief revenue officer of Flix Brewhouse Chris Randleman said. “The problem isn’t that people don’t want to go to theaters. We don’t have movies to show in August or September.”
University Mall and Cinema Arts owner Mark O’Meara echoed Randleman’s concerns.
“I’m hoping there are some sleeper hits,” he said, adding that the only surefire audience grab is the next family-friendly movie.
“I’m a little nervous about the next couple months. I don’t need to have gigantic blockbusters. It helps…but we need to have choices,” he said. “Hopefully we’ll get a couple more weeks out of [playing] ‘Minions’ and ‘Super-Pets.’”
The number of AMC investors increased drastically in 2021 when the company became a stock meme after passionate retail investors boosted stock value to corner short sellers.
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Now more than ever we’re bombarded by darkness in media, movies, and TV. Movieguide® has fought back for almost 40 years, working within Hollywood to propel uplifting and positive content. We’re proud to say we’ve collaborated with some of the top industry players to influence and redeem entertainment for Jesus. Still, the most influential person in Hollywood is you. The viewer.
What you listen to, watch, and read has power. Movieguide® wants to give you the resources to empower the good and the beautiful. But we can’t do it alone. We need your support.
You can make a difference with as little as $7. It takes only a moment. If you can, consider supporting our ministry with a monthly gift. Thank you.
Movieguide® is a 501c3 and all donations are tax deductible.
