AMC Entertainment Holdings (NYSE:AMC) has announced its forthcoming 10-to-1 reverse stock split, set to occur on August 24th, alongside the conversion of its preferred shares APE to common stock on August 25th.
During premarket trading, the value of the theater chain operator’s common shares experienced a 38% decline, reaching $3.25. Conversely, its preferred shares saw an 18% increase, reaching $2.09. With intentions to augment its Class A common stock from approximately 524 million to 550 million, AMC detailed this strategy in an official regulatory filing.
Upon completion of the reverse stock split, the company will offer one Class A common stock as a settlement payment for every 7.5 Class A shares to entitled shareholders. This move follows a revised stockholder settlement, gaining approval from a Delaware judge the previous week.
In the backdrop of a lawsuit filed in February, alleging manipulation of a shareholder vote, AMC sought to facilitate the conversion of preferred stock to common stock and the issuance of a substantial number of new shares.
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Author Faith Yakubu 
