AMC falls after Cineworld’s bankruptcy warning on day ‘APE’ starts trading

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An AMC theater is pictured amid the coronavirus disease (COVID-19) pandemic in the Manhattan borough of New York City, New York, US, Jan. 27, 2021. REUTERS/Carlo Allegri/File Photo

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Aug 22 (Reuters) – Shares of AMC Entertainment Holdings (AMC.N) fell nearly 30% on Monday after UK-based Cineworld (CINE.L) warned of a possible bankruptcy on the same day scaring investors from its preferred stock listing of the American cinema chain began trading.

AMC’s preferred stock, trading under the ticker “APE,” opened Monday at $6.95 on the New York Stock Exchange. The shares, intended as a dividend, have the same voting rights as common stock and can be used to raise capital in the future, the company said.

Trading in both share classes was halted multiple times in volatile trading.

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AMC and APE shares traded together at $21.21, which is higher than AMC’s latest closing price of $18.02, according to Reuters’ calculations.

“The problem is that the APE (dividend) security is a dilutive security that should be viewed as a 2 for 1 split,” said Thomas Hayes, chairman of Green Hill Capital.

AMC “pretends to give existing shareholders something of value, but in reality they’re just paving the way for future dilution.”

The decline in AMC shares was sparked after Cineworld, which owns Regal movie theaters in the United States, warned it is staring at a possible bankruptcy filing as it struggles to reduce debt that has skyrocketed during the pandemic. read more

Retail favorite AMC repeated a “relatively weak” film slate in Q3 2022 on Friday.

The COVID-19 lockdowns had a serious impact on the operations of cinema operators. However, AMC managed to raise $1.8 billion in 2021, capitalizing on the rally sparked by private investor interest in meme stocks, in stark contrast to the fate of Cineworld. read more

AMC shares are up more than 150% since the end of 2019, while Cineworld lost about 99% of its share value over the same period.

Other retail favorites accelerated recent losses with Bed Bath & Beyond Inc (BBBY.O) up 3% and Vinco Ventures (BBBY.O) up 9%.

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Reporting by Medha Singh, Anisha Sircar, Bansari Mayur Kamdar and Nivedita Balu in Bengaluru; Editing by Shinjini Ganguli

Our Standards: The Thomson Reuters Trust Principles.

The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

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