AMC's Clever Moves
$AMC Entertainment(AMC)$ will charge different rates for different movie theatre seats. The three-tier pricing is based on the location of the seat.
The meme stock has made clever moves to revive its floundering share price and mounting debt.
The movie theater chain plans to reduce debt to zero by converting its preferred equity "APE" units to common stock. Converting preferred equity to common stock is not unusual but it may be tough to get shareholders to approve of the conversion.
If converted, total outstanding AMC share value will jump from $524 million to $550 million. That is not a good thing since the stock price will likely go down. But AMC is getting its preferred share holders to vote alongside common stock owners. That could turn the tide in favor of the swap.
AMC also announced plans for a 10-for-1 reverse split on Dec. 12. Will the double action of eliminating debt and the number of outstanding shares save AMC stock? Both plans await a special shareholders' meeting for approval.
Has the movie theater stock done the right things to improve liquidity and protect itself from the perfect storm of mounting interest rates and crashing stock values?
Shares rose steeply during the pandemic but have fallen near all-time lows. AMC issued APE units last August.
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