AMC Announces Special Dividend in the Form of “Ape” Preferred Stock; stocks fall

The special dividend of one AMC preferred stock unit will be issued for each Class A common share of AMC, with a par value of $0.01 per share, outstanding at the close of business on August 15 . The special dividend is expected to be paid at the close of business on August 19. AMC has applied to list its AMC Preferred Stock Units on the New York Stock Exchange under the symbol “APE”, effective August 22. The symbol is a nod to the investors who turned the company into a stock meme, who often refer to themselves as “monkeys” or “monkey nation.”

“This new AMC preferred capital gives AMC currency that can be used in the future to strengthen our balance sheet, including paying down debt or raising new capital,” said AMC Chief Executive Adam Aron. , in a press release. “As a result, this significantly reduces any short-term survival risk for AMC as we continue to navigate our way through this pandemic.”

AMC will issue an APE dividend for each of its 516,820,595 outstanding shares, according to Aron. “Issuing tradable AMC preferred stock units only to our shareholders clarifies who is included in our current shareholder base,” he said in the statement. The company has faced unsubstantiated internet conspiracy theories that millions of synthetic AMC shares are outstanding, as well as calls for a stock recount, according to the Wall Street Journal.

The company, which issued an “I own AMC” NFT in January, will also issue an “I own APE” NFT to shareholders.

Speaking on a conference call to discuss the results, Aron said AMC has the option to issue more “monkeys” in the future.

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“I believe all of this makes us enormously, and I mean enormously, stronger,” he added. The CEO, who called AMC critics “naysayers” and “doomsayers” on the call, said the dividend is bad news for people “who don’t support AMC.”

AMC also released its second-quarter results after the market close, reporting a loss and lower revenue in line with analysts’ expectations. The movie theater chain reported a net loss of $121.6 million, or a net loss of 24 cents per share, compared to a net loss of $344 million, or a net loss of 71 cents per share, in the same period l last year.

AMC’s second-quarter sales were $1.166 billion, compared to $444.7 million in the same period last year. Analysts polled by FactSet were looking for sales of $1.168 billion and a net loss of 31 cents, or a net loss of 23 cents per share on an adjusted basis.

“AMC has just completed a spectacularly encouraging second quarter that lifts our mood and brightens our outlook for the future,” Aron said in a statement. “Our second quarter 2022 results, in our minds, once again prove what we’ve been saying for a long time, which is that as Hollywood releases movies with broad consumer appeal, people will flock to see them. in movie theaters in huge and mind-boggling numbers.”

In the second quarter, AMC welcomed 59 million people to its theaters worldwide, up 168% from 22 million in the same quarter a year ago, according to Aron. “So we’d like to send a special ‘thank you’ to Doctor Stephen Strange, Tom ‘Maverick’ Cruise, Elvis Presley and all those starving people-eating Jurassic dinosaurs who have graced our big screens this quarter,” he said. added.

Shares of the meme-stock darling, which soared to a high of $72.62 on June 2, 2021, have fallen 29.7% this year. AMC’s stock closed 2.47% higher at $18.66 on Thursday, well below its 52-week high at $52.79.

Wedbush analyst Alicia Reese was looking for positive second-quarter EBITDA from AMC amid an industry rebound. Quality movies are back in theaters, drawing crowds, she explained in a note earlier this week. “AMC is well positioned to capture and maintain a higher market share than in the pre-pandemic era as it improves its footprint both domestically and internationally,” she wrote. “That said, movie theater operators across the industry are spending more on marketing to bring customers back to theaters, while dealing with headwinds such as higher franchise costs, higher public services and higher wages.”

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AMC, which describes itself as the world’s largest movie company, reported adjusted EBITDA of $106.7 million, compared with a loss of $150.8 million in the same period last year. Wedbush had forecast adjusted EBITDA of $16 million.

Society has been on a rollercoaster ride over the past two years, which has transformed the theater chain from a beleaguered pandemic victim to a meme-stock phenomenon. AMC used the surge in its share price to tap into the equity and debt markets, raising $917 million in January 2021. At that time, Aron said the new funding meant that any discussion of impending bankruptcy “is completely irrelevant”.

Earlier this year, AMC surprised Wall Street by earning $27. 9 million investment in Hycroft Mining Holding Corp. HYMC,
+0.97%,
a gold and silver miner that operates well outside of AMC’s core business.

Speaking on the conference call, Aron noted that Hycroft Mining has just announced its biggest exploration program in about a decade. “We are confident that our investment in Hycroft will materialize, excuse the pun, to be lucrative enough for AMC,” he said. “I’m so confident that when history is finally written, it will be a good thing for AMC.”

However, AMC’s financial health remains a concern, according to data from RapidRatings, a company that rates the finances of public and private companies.

Of eight analysts polled by FactSet, three have hold ratings on AMC and five have sell ratings.