AMC Entertainment saw its stock price fall on Monday, following the ruling of a Delaware court that allowed the company to convert shares.
AMC Entertainment saw its stock price fall on Monday. This followed the ruling of a Delaware court that allowed the company to convert its preferred equity shares into common shares.Shares for AMC dove about 35% on Monday , bringing the company’s stock to its lowest levels since January 2021. The move comes as a Delaware Chancery Court judge approved a settlement that allows AMC Entertainment to convert its “AMC Preferred Equity” shares into common shares of the company.
Alongside that news, AMC will also be issuing a 1-for-10 reverse stock split in order to permit the conversion of all shares.The move itself was originally voted on in a shareholder election in March 2023. However, it’s just being decided now after a group of retail investors sued AMC to try and stop the move. The lawsuit alleged that the move would dilute the existing AMC stock, but they were unsuccessful in their attempt to stop the merger.
In a statement on the move, AMC Entertainment Chairman and CEO Adam Aron confirmed that the move would be happening “immediately,” and that the company was excited to begin the transition.
Aron also outlined steps the company plans to take in order to be more profitable and successful in the future. Specifically, Aron notes that without raising equity over the past three years, AMC “simply would not have survived” the decline that it saw during the COVID-19 pandemic. Now, he says, he hopes the company can be much more resilient.
Anthony Nash has been writing about games and the gaming industry for nearly a decade. When he’s not writing about games, he’s usually playing them. You can find him on Twitter talking about games or sports at @_anthonynash.
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