AMC Entertainment’s stock plummet by over 30% during pre-market trading on Monday ahead of the New York Stock Exchange debut of the company’s new class of stocks. Denoted by the ticker symbol $APE, the new AMC Preferred Equity (APE) shares get their name from the retail investors who boosted the stock during COVID-19 and sometimes refer to themselves as “apes”.
With a single unit of APE shares being granted for each common share, 517 million shares will be released. This new share class is aimed at helping AMC raise the funds it needs to reduce its debt while also targeting the acquisition of more movie theatre chains.
“It takes survival risk off the table in the near term,” CEO Adam Aron stated. “So we can raise cash if we need it. That is good for our shareholders.”
Aron added that this strategy will work well alongside the company’s improving box office business, with customers returning to movie theaters following the downturn caused by the COVID-19 pandemic.
While the company is capable of listing five billion APE shares based on shareholders’ approvals back in 2013, Aron confirmed that he has no plans to do so.