AMC Entertainment Stock Is Falling Today: What's Going On?

AMC Entertainment Holdings Inc AMC shares are trading lower Tuesday after the international theater chain company reached a settlement with shareholders, which would allow for the conversion of AMC Preferred Equity Units APE shares into common shares.

The Details: The move will be part of a recapitalization that will give AMC access to equity needed to "service its debt obligations as it continues its recovery from the pandemic."

The settlement will result in a reverse split that will give holders of AMC common stock one share for every 7.5 shares held in connection with a planned conversion of preferred APE units into common stock. The distribution of approximately 6.9 million post-reverse split shares is expected to have an aggregate value over $100 million. 

"Our clients are pleased to have reached this successful agreement on behalf of all AMC common stockholders ... Common stockholders will have a greater stake in AMC as it continues on its path to recovery," lawyers representing common stockholders said.

APE units were up 17.6% at $1.74 on the heels of the announcement. 

AMC is set to announce first-quarter financial results before the market open on May 5. In the comparable quarter last year, AMC beat analyst expectations when it reported a loss of 52 cents per share on quarterly revenue of $785.7 million, according to Benzinga Pro.

See Also: US Stocks Set To Open Higher Today On Strong Momentum: Analyst Says Next Fed Rate Decision Could Be 'Near-Tossup'

AMC Price Action: AMC has a 52-week high of $27.49 and a 52-week low of $3.77.

AMC shares were down 23.9% at $3.89 at the time of writing. 

Photo: Paul Sableman from Flickr.