AMC Preferred Equity (APE) Jumps As AMC Entertainment Stock Falls: What's Going On?

AMC Entertainment Holdings Inc AMC shares are trading lower Tuesday, while AMC Preferred Equity Units APE surge — what's going on?

AMC declared a special dividend in the form of APE, or AMC Preferred Equity units at the beginning of the month. One APE was distributed for each share of AMC class A common stock outstanding at the close of business on Aug. 15. 

AMC Preferred Equity units began trading under the ticker symbol "APE" on Monday. The preferred shares were issued to all common stockholders.

Shortly after the APE units began trading and AMC Entertainment common stock opened sharply lower, AMC CEO Adam Aron reminded investors that its special APE dividend is not dilutive.

"IMPORTANT! Remember that with the APE already having had its first NYSE trade today, the value now of your AMC holdings consists of the prices of your AMC shares and your new APE units COMBINED," Aron said Monday via tweet.

AMC Preferred Equity units were halted for volatility several times on Monday. The APE units have already been halted twice in Tuesday's session. APE continues to trend higher despite a move lower in AMC Entertainment common stock, which could be in response to a downgrade from Wedbush.

Wedbush analyst Michael Pachter maintained AMC Entertainment with an Underperform rating on Tuesday and lowered the price target from $4 to $2.

Related Link: AMC Entertainment Price Target Cut By This Analyst, Plus DA Davidson Predicts $318 For Estée Lauder

APE Price Action: AMC Preferred Equity units traded as high as $10.50 and as low of $5.21 on Monday.

APE was up 25.2% at $7.51 at time of publication, according to Benzinga Pro.

Photo: Eden, Janine and Jim from Flickr.