AMC Entertainment Holdings Inc. stock dropped almost 22% in the extended session Monday after the movie-theater operator said in a filing that it has agreed to settlement terms relating to a shareholder litigation around a stock conversion.
The terms of the settlement would open the way for AMC’s proposal to convert its AMC Preferred Equity, or APE, units into shares of common stock, alongside a 10-to-1 reverse stock split and the capacity to sell more shares, which shareholders supported in mid-March but had faced court proceedings.
Shares of AMC ended the regular trading day up 2%. APEs were up around 22% in the extended session.
A final settlement is subject to a formal agreement and court approval; terms also include payment to the plaintiffs of about 4.4% of AMC’s stock, or about 6.9 million shares.
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