On Monday, AMC’s shareholders approved two measures that CEO Adam Aron had lobbied for as crucial for shoring up AMC’s financial foundation. The choreographed maneuver consisted of an expansion in the number of tradable shares to 550 million followed by a 10-for-1 reverse stock split. The two measures taken together had the effect of raising the trading price of AMC shares.
The company also took steps to transition a special class of “APE” shares into AMC common stock. APE units were created in 2021 to facilitate investments from retail investors, without requiring the approval of AMC’s existing shareholders. These new APE shares have traded at a significantly lower price than the company’s common stock. On April 7th, a U.S. Federal Court in Delaware is scheduled to review AMC’s proposal to eliminate APE shares, which is being opposed by many current investors.
These moves are just the latest in a long line of financial gymnastics intended to keep the exhibitor afloat, struggling for years with compromised revenues and massive debt. In the end, the most significant factor in AMC’s future financial standing will be its ability to increase revenues on the strength of an expanding film slate in 2023 and beyond.
See also: Rise of the APEs, Coming to a Theater Chain Near You (Wall Street Journal)