Shares of AMC Entertainment Holdings Inc. (AMC) fell 21% on Wednesday as the movie-theater chain prepares for a stock conversion this week. This decline follows two consecutive days of losses, with Tuesday's session ending down 18.3% and Monday's session down 23.7%, marking the largest daily percentage drop since August 14.
Conversion of AMC Preferred Equity Units
APEs Experience Decline
The AMC Preferred Equity units (APEs), named after the investors who turned the company into a meme stock and refer to themselves as "apes" or "ape nation," also experienced a decline of 5.1% on Wednesday.
Key Dates and Details
According to a Form 8-K filed with the SEC, the reverse stock split is set to occur on August 24, which is also the record date for a litigation-settlement payment. The conversion of APEs into AMC common stock is expected to follow on August 25, during which APEs will cease trading and be delisted from the New York Stock Exchange.
In light of the reverse stock split and conversion, AMC will make a settlement payment consisting of one share of Class A common stock for every 7.5 shares owned by settlement-payment recipients as of August 24. Based on expected holdings, an aggregate of approximately 6,922,566 shares of Class A common stock will be issued in the settlement.
Market Panic on the Horizon?
Stocktwits, a social platform for investors and traders, highlighted a sense of "panic" surrounding AMC on its platform. It remains to be seen what lies ahead for AMC following the court approval of its revised stock-conversion plan.