AMC Preferred Stock Changes
AMC Entertainment Holdings Inc, a movie theater chain, experienced a decline in its shares by 15 percent on Tuesday after the approval of a proposal to convert the company’s preferred stock into common shares, along with a one-for-ten reverse share split. The preferred shares were issued in August as part of a plan to pay down the company’s debt but have since lost over 70%. The company faces a lawsuit claiming it circumvented shareholders who were against adding more shares, with a hearing set for April 27.
AMC became a “meme stock” during the COVID-19 pandemic, raising more than $2 billion in 2021 as retail investors piled in to its stock and others such as GameStop Corp, which short sellers had bet against. The common stock was down 17.3% at $4.52 following the vote, putting it on track for its worst day in almost two years. The preferred shares were up 6.9% at $1.85.
The company’s Chief Executive Officer, Adam Aron, commented that the company’s strategy to combat naysayers and profits of doom is to keep their cash reserves robust, manage their balance sheet smartly, and operate their company as well as they know how. However, AMC investors suing the company have accused the movie theater chain and several of its directors of violating a law by creating the preferred shares in an attempt to kill the voting power of common stockholders who had not supported issuing new shares.
AMC Stock Price & Analysis
Three analysts have predicted an average target price of USD 5.66 for AMC Entertainment Holdings Inc over the next 12 months, with a Buy rating. Stock Target Advisor’s analysis of the company’s stock signals is Slightly Bullish, based on 5 positive signals and 4 negative signals. AMC’s stock price at the last closing was USD 5.46, reflecting a -12.64% change over the past week, a +16.67% change over the past month, and a -61.82% change over the last year.
