AMC Entertainment Stock Is Sliding: What's Going On?

AMC Entertainment Holdings Inc AMC shares are trading lower Thursday. The move appears to be in reaction to a recommendation from special master Corinne Elise Amato on the objections raised in relation to the company's proposed settlement with shareholders.

What To Know: AMC shares tumbled in early April after the company proposed a settlement with shareholders, which would allow for the conversion of AMC Preferred Equity Units APE into common shares.

The move is expected to be part of a recapitalization that will give AMC access to equity to service debt. The settlement would result in a reverse split that gives 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 settlement was met with a class action complaint and proposed settlement and the special master was asked by Delaware’s Court of Chancery to review the objections. 

In Amato's report dated June 21, the special master concludes, "I recommend that the Court DENY the Objections to the Settlement as set forth herein."

APE shares popped more than 11% Thursday morning following the news.

AMC has released a court document on its investor relations site noting that a two-day hearing is scheduled for June 29 and June 30. 

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AMC Price Action: AMC shares are down more than 3% over the last month, but the stock is up more than 10% year-to-date.

AMC shares were down 7.06% at $4.21 at the time of writing, according to Benzinga Pro.

Photo: Paul Sableman from Flickr.