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Investors receive preferred stock for each share of common stock they own.
Gina Moon/Bloomberg
AMC Entertainment
Finally giving the “apes” what they want. The cinema company has linked its second-quarter earnings report with news that it is offering shareholders a special dividend on its AMC preferred stock units.
AMC Preferred Stock will trade on the New York Stock Exchange beginning August 22 under the ticker “APE.” AMC (NYSE:AMC) announced that it will issue 516.82 million APE shares. Preferred stock is convertible into common stock, but only if AMC shareholders vote to increase the number of authorized shares of common stock. AMC last year withdrew from asking shareholders to increase its potential shares, citing a lack of investor support.
The Wall Street Journal reported, citing a person familiar with the matter, that the preferred stock unit would allow the company to circumvent restrictions imposed on the sale of common stock. The WSJ notes that the company could sell another 4.5 billion APEs after giving out the first 517 million. AMC struggled amid the pandemic and sold millions of shares in 2021 to help keep its theaters closed.
The special dividend will be paid to shareholders of record on August 15 and will be paid at the close of business on August 19. The ex-dividend date is August 22nd. AMC recommends that investors trading during this period consult their brokers, but those who sell on the 22nd are entitled to preferred shares.
On sites like Twitter and Reddit, dividends in stock or non-fungible tokens have become popular requests among some AMC shareholders.Such users, who call themselves “apes,” are the fake AMCs and
game stop
stock. The WSJ reported, citing a person familiar with the matter, that the company hopes a dividend given to legitimate shareholders will put an end to such theories about fake shares. Shareholders of AMC’s Investor Connect site will also receive her NFT.
An AMC spokesperson did not respond to a request for comment on the WSJ report.
In the announcement, AMC CEO Adam Aron called the shareholder-only preferred dividend “perhaps the biggest move we will take throughout 2022 to fundamentally strengthen AMC over the long term.” I called.
“This new AMC preferred stock will provide AMC with a future-proof currency and strengthen its balance sheet, including repaying debt and raising new capital,” said Aron. “As a result, the short-term survival risk of AMC is dramatically reduced to help us survive this pandemic.”
AMC also reported a second-quarter net loss of $121.6 million, or 24 cents per share on earnings of $1.2 billion. Analysts expected him to make $1.17 billion in sales, according to FactSet. The company reported a non-GAAP net loss of 20 cents per share, beating consensus expectations of an adjusted loss of 23 cents per share, according to FactSet. Aron pointed out that his investment in Hycroft Mining (HYCM), a gold and silver mining company in Nevada, led to write-downs. Highcroft’s stock price fell more than 48% during the quarter.
Aron noted that AMC’s global attendance reached 59 million, a 168% increase from the second quarter of 2021. He also said his food and beverage income per patron increased from $5.58 in the pre-pandemic quarter of 2019 to $7.52.
AMC shares fell 4.9% in after-hours trading.
Write to Connor Smith at connor.smith@barrons.com
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