Banking services and bank accounts are offered by Jiko Bank, a division of Mid-Central National Bank. JSI and Jiko Bank are not affiliated with Public Holdings, Inc. (“Public”) or any of its subsidiaries. None of these entities provide legal, tax, or accounting advice. Options
Certain requirements commodity trading strategy must be met in order to trade options. Options transactions are often complex, and investors can rapidly lose the entire amount of their investment or more in a short period of time. Investors should consider their investment objectives and risks carefully before investing in options.
- For purposes of this section, Bonds exclude treasury securities held in treasury accounts with Jiko Securities, Inc. as explained under the “ Treasury Accounts” section.
- IPhone sales are slowing, and the company is now relying on services for growth, squeezing suppliers at every turn.
- While the bottom line impact for AMC of the APE units will not be clear for a while, there are details that investors in both the APE units and the common stock should know now.
- Each APE unit may be converted in the future to one common share of AMC, making this move like a 2-for-1 split.
- Do not infer or assume that any securities, sectors or markets described in this article were or will be profitable.
Sign-up to receive the latest news and ratings for AMC Entertainment and its competitors with MarketBeat’s FREE daily newsletter. She recently upgraded AMC from underperform to neutral and set a price target of $19. As for the industry, the summer movie season has been busy, but Hollywood writers and actors are on strike. The strike ensures a gap in content production, which will affect movie ticket sales in the months ahead.
Business
The stock dividend ultimately doubled AMC’s share count, just as a 2-for-1 stock split would. The reverse split and APE conversion are two parts of AMC’s plan to raise equity capital and reduce debt. The company has said these are necessary actions to avoid bankruptcy.
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 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. The special dividend acts similar to a 2-for-1 stock-split where instead of receiving two AMC shares for each share held, investors received one APE share and retained their previous AMC share. On the day of issuance AMC stock fell 42% but adjusting for the value of APE units issued left the shares down “just” 5.5% for the day. Because the APE units are preferred equity, there are different rights in a potential bankruptcy proceeding than the regular common stock.
In some ways, the unusual move resembles a stock split, where investors get additional stock proportional to every one share they previously owned. Each APE unit may be converted in the future to one common share of AMC, making this move like a 2-for-1 split. The research firm Wedbush lowered its price target from from $4 to $2 on Monday after the shares were issued and AMC stock plunged 40%. “While it makes little sense for APE to trade below AMC, we think that it reflects concerns over impending dilution. AMC is pre-authorized to issue up to 4.5 billion additional preferred shares of APE to raise cash,” Wedbush analyst Alicia Reese cautioned in a Tuesday note.
An indication of interest to purchase securities involves no obligation or commitment of any kind. The reality is that very few people interested in either AMC shares or APE units are concerned about a potential bankruptcy and are more likely just looking to make short-term trades on current sentiment. The nature of the preferred shares should lead them to trade similar to AMC common stock but the real mover for the moment appears to be how much it is discussed on Reddit.
“A seat on the GE board was not necessarily as coveted in 2018 as it might have been in 1998,” Culp allows. After naming Culp as CEO, the board appointed one of his fellow recruits, Tom Horton, as lead director replacing Culp, an arrangement strongly endorsed by Culp. As CEO of American Airlines, he’d engineered the massive overhaul that lifted the nation’s largest carrier from bankruptcy during 2013 and 2014. The third newcomer was Leslie Seidman, former chief of the Financial Accounting Standards Board. During Culp’s tenure, Seidman helped GE navigate the wind-down of its large long-term-care reinsurance portfolio that some experts, among them famed investigative accountant Harry Markopolos, predicted would sink Culp’s then-floundering vessel. Ives increased his sales estimate of the Vision Pro to more than 600,000 units in 2024 from his prior estimate of 460,000 units.
Markets
“There’s bad dilution and good dilution. If added liquidity gained from dilution is wasted, it’s bad. However, if wisely handled, it is good. Indeed, for AMC in 2021, it was actually great for our shareholders,” Aron tweeted on Aug. 6. AMC raising additional money through the APE units would not be a surprise on Wall Street. One asset they may well keep sharing, however, is Katahira-san, who’s been working his magic at plants across GE, and has proved to all and sundry that his universal language of lean will work anywhere. It’s a sure thing that Culp as CEO of GE Aerospace will keep summoning the septuagenarian whirlwind who first so impressed him three decades ago at Toyota. “If he’s at a kaizen site for a week, I’ll try to drop in and go to dinner with him,” says Culp.
Stocks Set to Build Your Wealth Fast in 2024
The Delaware Court allowed the March 14 vote on the APE preferred units conversion to go ahead, but the planned court hearing in April could delay any new debt-raising action by AMC following the shareholder vote. Shareholders in AMC Entertainment Holdings have voted to allow the parent of AMC Theatres to convert AMC Preferred Equity Units, or so-called APEs, into the company’s common shares. Unfortunately for AMC, a tenfold rise in stock price hasn’t held.
The results of the special shareholders meeting paves the way for the exhibition giant to continue raising fresh cash to reduce its debt load by selling stock, instead of APE units, and increasing its authorized share base. In a stock split, the share count rises and the share price falls. A 2-for-1 split, for example, doubles the share count and halves the share price. These effects cancel each other out, which is why the value of shareholders’ positions and the company’s market cap don’t change. “Today we are rewarding and recognizing our passionate and supportive shareholders, both to our shareholders in the U.S. and internationally,” CEO Adam Aron said in a statement. “Shareholders will receive one AMC Preferred Equity unit for each company issued share of AMC common stock that they own.”
Share this article:
Plans are not recommendations of a Plan overall or its individual holdings or default allocations. Plans are created using defined, objective criteria based on generally accepted investment theory; they are not based on your needs or risk profile. You are responsible for establishing and maintaining allocations among assets within your Plan. Plans involve continuous investments, regardless of market conditions.
AMC Entertainment Holdings, Inc. operates as a holding company. The Company, through its subsidiaries, provides theatrical exhibition, movie screening, food distribution, online ticket booking, and other related services. AMC Entertainment appears to have found a creative solution to boost its share count and raise funds after investors balked at a proposal to issue more shares last year. 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. A single APE unit will be granted for each common share, meaning that about 517 million shares of this new stock will be formed.
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. These preferred equity units are a workaround, of sorts, and free AMC up to sell additional units of stock as it continues to revive its business after the pandemic. After offering the 517 million APE units, AMC will still have around 4.5 billion units remaining that it could sell to raise funds.
Releasing the APEs not only references how some of these investors refer to themselves, but also allows the firm to bypass the need to increase the number of common shares. AMC Entertainment (AMC) has fully embraced its meme popularity with the release of a special dividend called “APE” units. 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. All investments involve the risk of loss and the past performance of a security or a financial product does not guarantee future results or returns. You should consult your legal, tax, or financial advisors before making any financial decisions.
Yet AMC’s new APE shares are designed to attract retail investors, so they function practically like common stock; they have the same economic and voting rights as AMC common shares. In late Dec. 2022, AMC announced it raised $110 million to pay down debt by selling APE units to Antara Capital, https://bigbostrade.com/ LP to reduce the company’s debt load by around $100 million. The vote at the special meeting of shareholders was required to permit a wider conversion of APE units into AMC common shares. AMC is approved to issue up to 1 billion APE units with its board able to authorize up to 5 billion.