AMC Entertainment Holdings Inc shares tumbled 24% in extended trade on Monday, while its preferred shares jumped 21% after the movie theater chain said it agreed to settle litigation and proceed with converting its preferred stock into common shares.
Closed signs are seen on an AMC Theatre during the outbreak of the coronavirus disease , in New York City, U.S., April 29, 2020. REUTERS/Brendan McDermidshares tumbled 24% in extended trade on Monday, while its preferred shares jumped 21% after the movie theater chain said it agreed to settle litigation and proceed with converting its preferred stock into common shares.
AMC investors suing the company accused it and several of its directors of violating a law by creating the preferred shares in an attempt to "eviscerate" the voting power of common stockholders who had not supported issuing new shares. AMC said that as part of the settlement, it has agreed to pay the plaintiffs one share for every 7.5 shares they own. In a separate press release, plaintiffs lawyers said they expected the shares paid to their clients to be worth over $100 million.
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