Why AMC Entertainment Stock Is Falling. And What Are APE Shares? - AMC Enter Hldgs (NYSE:AMC)

AMC Entertainment Holdings Inc AMC shares are trading lower Monday as the company's APE preferred shares begin trading on the New York Stock Exchange. The preferred shares were issued to all common stockholders.

At the beginning of August, AMC declared a special dividend in the form of APE, or AMC Preferred Equity units. One APE was distributed for each share of AMC class A common stock outstanding at the close of business on Aug. 15. Beginning today, AMC Preferred Equity units will be listed on the NYSE and trade under the ticker symbol "APE."

AMC CEO Adam Aron took to Twitter on Sunday to remind investors of what to expect Monday morning.

"Remember, with the APE seeing its first trade on the NYSE at some time tomorrow morning, the value of your AMC investment will be the combination of your AMC shares and your new APE units," Aron said.

"An AMC share plus a new APE unit added together — compared to just an AMC share previously," he added.

Monday marks the ex-dividend date for the AMC Preferred Equity unit dividend. Any investors who sold shares before Monday will not be entitled to the dividend on the shares that were sold. Any investors who bought AMC shares before Monday will be entitled to receive the AMC Preferred Equity unit dividend on the shares purchased.

AMC competitor Cineworld Group Plc CNNWF also confirmed on Monday that it's considering potential bankruptcy, which could be adding to the move lower in AMC shares today.

"The strategic options through which Cineworld may achieve its restructuring objectives include a possible voluntary Chapter 11 filing in the United States and associated ancillary proceedings in other jurisdictions as part of an orderly implementation process," the company said in a statement.

Watch ModernIR CEO Tim Quast discuss the AMC preferred equity units on Monday's "PreMarket Prep" show: