AMC, APEs slide for fourth day, in wake of reverse stock split
AMC Entertainment (AMC) has tumbled 28% -- and AMC Preferred Equity units (APE) nosedived 21% as well -- as the two securities hunted for an equilibrium price a day ahead of a transformative stock conversion.
AMC executed a 1-for-10 reverse split Thursday, taking its share count from about 520M to 52M, which correspondingly boosted its per-share price tenfold.
On a split-adjusted basis, the stock was down 28% Thursday morning, pacing toward its fourth straight day of double-digit drops (it fell 24%, 18% and 13% on each of the last three trading sessions).
Friday's action will bring the conversion of all outstanding APE units into AMC common stock, and on Thursday the APEs (APE) were also slipping for a fourth day (they fell 7%, 11% and 8% on the first three trading days of the week).
On Friday, some 995M APEs will convert to somewhere around 100M common shares of AMC, and stop trading. As of noon Thursday, APEs traded at $1.37 while AMC traded at $14.15 after the reverse split.
Meanwhile, after Friday's conversion, there's still one more key piece of the plan to come on Monday: a litigation settlement payment of one additional share for every 7.5 owned as of Thursday's close -- resulting in another 59M pre-conversion AMC shares.
After that, the AMC outstanding share count should rest around 158M, and the company has authorization to issue up to 550M more.
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