AMC stock plunges amid $APE debut, Cineworld troubles
AMC Entertainment is officially going "APE" in an effort to further solidify its financial future as its primary rival Cineworld says it's exploring a bankruptcy.
The company's new class of shares — dubbed APE in a nod to the retail investors who powered the stock during the COVID-19 pandemic and commonly refer to themselves as apes — is slated to begin trading on the NYSE sometime today. The ticker symbol will be $APE.
A single APE unit will be granted for each common share, meaning that about 517 million shares of this new stock will be formed.
AMC stock fell more than 34% in early trading on Monday.
AMC Entertainment CEO Adam Aron told Yahoo Finance Live (video above) that the company's new AMC Preferred Equity (APE) shares should allay fears that the movie chain could cripple under the weight of debt incurred during the COVID-19 pandemic.
"It takes survival risk off the table in the near term," Aron said. "So we can raise cash if we need it. That is good for our shareholders."
Aron added that this latest clever initiative (the other being the gold mine AMC bought earlier this year) will help AMC raise cash to reduce debt and look at acquisitions of more movie theater chains.
"The other thing it lets us do is raise capital to grow, raise capital for M&A activity, and raise capital to pay down debt," Aron said. "These are all good things for AMC. That, combined with an improving box office, a recovery from the horrible pandemic of 2020 and early 2021, these are good days for AMC."
Aron said the company could theoretically list five billion APE shares based on what was approved by shareholders back in 2013 but added that he has no plans to do so.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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