Movie theater leader AMC Entertainment Holdings Inc (NYSE:AMC) reported second-quarter financial results after market close Thursday. Along with earnings, the company also announced the declaration of a special dividend in the form of AMC Preferred Equity units.
What Happened: AMC announced it will pay out one AMC Preferred Equity unit for each share of AMC Class A common stock based on a record date of Aug. 15, 2022.
The dividend is expected to be paid out Aug. 19 and begin trading on Aug. 22.
The new unit will trade on the New York Stock Exchange with ticker “APE.”
“The AMC Preferred Equity Units will provide AMC with a currency that can be used in the future to strengthen our balance sheet, including debt repayments, and provide capital for shareholder value-enhancing and transformative investment opportunities,” the company said.
AMC CEO Adam Aron took to Twitter Inc (NYSE:TWTR) to share several posts and an open letter to AMC Investors outlying the decision for the new units and what it means for AMC’s future.
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Why It’s Important: Aron called the move a “bold step” for the company and explained how it relates to his recently used hashtag “Wen Pounce,” which could refer to the large number of short sellers for AMC stock.
“In addition to releasing our handsomely improving second quarter 2022 earnings, we also broke out the 3-D chess board and got creative. A big move that addresses so many of your asks. TODAY…WE…Pounce,” Aron tweeted.
Aron highlighted the strong quarter once again in his series of tweets and told investors its time to take “bold action” while using the hashtag #TodayWePounce.
“Thank you for being a passionate supporter of AMC. Together we have successfully navigated many obstacles since the onset of the COVID-19 pandemic,” Aron said.
Aron told investors there is more work to be done and the issuance of units is a bold step to strengthen the company.
“We believe this is truly great news for AMC and not such good news for those prophets of doom who may be rooting against us.”
Referring to the new ticker of APE, Aron offered up a description of the ticker using an acronym.
“Yes, APE, as in AMC Preferred Equity.”
Aron said shareholders have been requesting dividends for a long time and this method was done as it comes with no dilution.
“Today, we answered your call.”
APE will come with the same rights as common shares and can be converted into common stock, something Aron said provides flexibility for the future.
“Rather than having to worry about survival, the flexibility accruing us from APES can instead let us continue to try for AMC to soar and to thrive.”
As a token of appreciation to shareholders and in honor of the new announcement, AMC is offering a free non-fungible token (NFT) to all AMC Investor Connect members that will feature the words “I OWN APE” that join by Aug. 21, 2022. The move follows a similar "I OWN AMC" NFT that was previously offered.
Aron told investors he owns $15 million worth of AMC stock based on Thursday’s price and has an economic stake of around $50 million based on granted but unvested shares.
“This is pretty obvious, but that is powerful incentive to do what is right for our shareholders.”
Aron said he promised investors AMC would be bold and again highlighted that today, “we pounced.”
AMC Price Action: AMC shares are down 11.84% to $18.66 in after-hours trading Thursday.
Photo: PO11 via Shutterstock
