Reversal

<div class="textg" style="text-align: justify; font-weight: lighter; line-height: 1.3em; font-size: 15px; border-radius: 3px; color: #80909a; padding: 10px; background-color: #F4F6F9; margin-bottom: 15px;">
  Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our&nbsp;<a href="https://tokenist.com/terms-of-service/" style="text-decoration:underline;color:#3c7b7b" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">website policy</a>&nbsp;prior to making financial decisions. 
</div> 
<p class="has-drop-cap">AMC Entertainment Holdings (AMC) is having a tumultuous week. It all started on Friday when Delaware Chancery Court ruled that the company could proceed with its proposal on March 14. By majority shareholder vote, the proposal outlined that all outstanding APE units would be converted into AMC common shares on August 24th.</p> 
<p>A day later, APE units will cease trading.&nbsp;How that will affect the <a href="https://tokenist.com/investing/meme-stocks/" rel="noopener noreferrer nofollow" class="deco-link">meme stock arena</a> is yet to be unfolded.</p> 
<h3 id="ape-to-cease-trading">APE to Cease Trading</h3> 
<p>Issued in Q2 2022 to raise more capital to repay debt, as AMC Preferred Equities (APEs), each AMC shareholder received one APE. Since then, APE units served AMC well, having raised $435 million through sales. The problem is the proposal would enact the stock split reversal in a 1-for-10 ratio.</p> 
<p>Retail AMC shareholders, dubbed apes on r/wallstreetbets, are reacting negatively/speculatively to the proposal’s sanction by the court. Since Friday, AMC shares have lost -32% of value in premarket trading, while APE units gained 20%.</p> 
<div class="wp-block-image"> 
 <figure class="aligncenter size-large"> 
  <img decoding="async" width="1024" height="754" src="https://tokenist.com/wp-content/uploads/2023/08/Screenshot-2023-08-14-164453-1024x754.png" alt="" class="wp-image-167063" srcset="https://tokenist.com/wp-content/uploads/2023/08/Screenshot-2023-08-14-164453-1024x754.png 1024w, https://tokenist.com/wp-content/uploads/2023/08/Screenshot-2023-08-14-164453-300x221.png 300w, https://tokenist.com/wp-content/uploads/2023/08/Screenshot-2023-08-14-164453-768x566.png 768w, https://tokenist.com/wp-content/uploads/2023/08/Screenshot-2023-08-14-164453-650x479.png 650w, https://tokenist.com/wp-content/uploads/2023/08/Screenshot-2023-08-14-164453-205x152.png 205w, https://tokenist.com/wp-content/uploads/2023/08/Screenshot-2023-08-14-164453.png 1170w" sizes="(max-width: 1024px) 100vw, 1024px"> 
  <figcaption class="wp-element-caption"> <em>AMC Preferred Equities (APEs) vs AMC shares since Friday. Image courtesy of TradingView</em> 
  </figcaption> 
 </figure> 
</div> 
<p>In July, the month of <a href="https://tokenist.com/meme-stocks-have-made-a-comeback-this-year-as-retail-goes-all-in/" rel="noopener noreferrer nofollow" class="deco-link">meme stock comeback</a>, the court rejected a $129 million worth settlement to AMC common shareholders related to the stock split conversion proposal that was perceived as dilution. After the tweaked settlement was approved on Friday, CEO Adam Aron described it as a “significant milestone.”&nbsp;</p> 
<p>As a mitigating effort, AMC CEO Adam Aron published an <a href="https://twitter.com/CEOAdam" target="_blank" aria-label=" (opens in a new tab)" rel="noopener noreferrer nofollow" class="deco-link">open letter</a> on Monday, attempting to address apes’ top concerns.</p> 
<h3 id="the-purpose-behind-the-ape-stock-split-reversal">The Purpose Behind the APE Stock Split Reversal</h3> 
<p>According to Aron, the Friday-approved proposal is all about AMC stock consolidation. Specifically to simplify AMC ownership into a single equity class. Aron noted complexities in stock brokerages that have resulted from the split, incurring capital inefficiencies.&nbsp;</p> 
<p>Moving forward after August 24th, the consolidated AMC equity would be more attractive to investors. Regarding the 1-for-10 stock split reversal, Aron made an analogy to justify the decision.&nbsp;</p> 
<blockquote class="wp-block-quote"> 
 <p><em>“If someone takes ten $1 bills from your left hand but puts one $10 bill in your right hand, would you be losing 90% of your money?”</em></p> 
</blockquote> 
<p>However, Aron admits AMC’s value after the proposal’s execution is unknown. Whether it goes up or down depends on “bad actors,” to which Aron attributes the current AMC price drop.&nbsp;</p> 
<div class="cta-referral"> 
 <img src="https://tokenist.com/wp-content/themes/thetokenist/assets/img/del/cta-referral-1.png" alt="" class="cta-referral__img" loading="lazy" decoding="async"> 
 <div class="cta-referral__text"> 
  <p>Join our&nbsp;<a href="https://t.me/thetokenist" target="_blank" rel="noopener noreferrer nofollow">Telegram group</a>&nbsp;and never miss a breaking digital asset story.</p> 
 </div> 
</div> 
<h3 id="how-much-debt-does-amc-have-to-service">How Much Debt Does AMC Have to Service?</h3> 
<p>AMC published its <a aria-label=" (opens in a new tab)" href="https://s25.q4cdn.com/472643608/files/doc_earnings/2023/q2/earnings-result/AMC-Second-Quarter-2023-Earnings-Release-FINAL.pdf" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">Q2 2023 earnings</a> last week, on August 8th. The company’s net income turned positive year-over-year, at $8.6 million, compared to Q2 ‘22 loss of $121.6 million. During the quarter, APE sales resulted in $34 million in cash on hand, contributing to AMC’s debt principal reduction by $42 million.&nbsp;</p> 
<p>While AMC tracked 12% attendance growth, it scored 15% total revenue growth. The quarter ended with $643.4 million as available liquidity, with interest payments going down to $134.7 million compared to the end of 2022’s $178.7 million.&nbsp;</p> 
<p>Overall, AMC holds $4.8 billion in debt, bringing down the company’s debt-to-equity ratio to -186%. With the recent stock downfall, the negative percentage has increased.&nbsp;</p> 
<p>AMC shares trade at -8.4% of their value year-to-date, at $3.60. APE units increased by 75%, at $2.09 per unit during the same period. Interestingly, this is nearly the same year-to-date performance of Bitcoin, which gained 77%.</p> 
<div class="cta-sub js__cta-sub"> 
 <div class="cta-sub__start" data-step="1"> 
  <div class="cta-sub__title"> <strong>Finance is changing.</strong> 
  </div> 
  <div class="cta-sub__subtitle">
    Learn how, with Five Minute Finance. 
  </div> 
  <div class="cta-sub__excerpt">
    A weekly newsletter that covers the big trends in FinTech and Decentralized Finance. 
  </div> <button type="button" class="btn">Try it out (for free)</button> 
 </div> 
 <div class="cta-sub__form" data-step="2" style="display: none;"> 
  <script type="text/javascript" src="https://app.getresponse.com/view_webform_v2.js?u=QcLhh&amp;webforms_id=hpcwd"></script> 
 </div> 
 <div class="cta-sub__result" data-step="3" style="display: none;"> 
  <div class="cta-sub__title">
    Awesome 
  </div> 
  <div class="cta-sub__caption">
    You’ve subscribed. 
  </div> 
  <div class="cta-sub__greeting">
    You’re well on your way to being in the know. 
  </div> 
 </div> 
</div> 
<p><strong><em>Do you think AMC shares will end up in two-digit positive territory by the end of 2023? Let us know in the comments below.</em></strong></p> 
<p>The post <a rel="noopener noreferrer nofollow" href="https://tokenist.com/amcs-ape-to-cease-trading-from-25th-aug/">AMC’s APE to Cease Trading from 25th Aug</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://tokenist.com">Tokenist</a>.</p>

AMC’s APE to Cease Trading from 25th Aug

Daftar Isi

Tokenist

Artikel lain yang dipublikasikan pada 14 Agu 2023

SEC’s Delay in Bitcoin ETF Verdict Fuels Speculation of Wall Street Power Play

Crypto Experts Recommend to Buy Cardano, Uniswap, and Bitcoin Spark Before The Next Halving in 2024

Did Ethereum Investors Bribe the SEC? How Is This Connected to Ripple?

Concerned Users Say ChatGPT 4 Getting Worse With Time, Borroe’s Innovative Features Make $ROE A R...

Ethereum (ETH) Burn Rate Plummets Dramatically, No Longer Deflationary?

Bitcoin vs. gold: Are market cap and other comparisons actually relevant for investors?

Bergabunglah dengan buletin gratis kami untuk pembaruan kripto harian!