AMC preferred $APE shares will lead to massive $AMC stock dilution:
AMC Entertainment to introduce a preferred stock unit, ticker APE."Today we pounce" was the rallying call from AMC CEO Adam Aron to his AMC ape followers with the announcement of AMC preferred share units, which will trade under the ticker APE. The preferred share units have a nominal value of $0.01 and will be issued as a form of bonus to all existing ordinary shareholders. Not exactly the pounce AMC apes had been waiting for and the confusion reigned supreme on the announcement.
AMC shareholders are receiving preferred equity units, not preferred equity. These AMC preferred equity units will trade under the ticker APE. For every one share of AMC you hold, you will get one preferred unit, which gives you one extra vote. That keeps your voting powers intact. AMC is issuing just under 517 million preferred equity units to all AMC shareholders, but here is where shareholders got duped.
On August 4, 2022, the Company filed a Certificate of Designations with the Secretary of State of the State of Delaware designating 10,000,000 shares of the Company’s authorized preferred stock as Series A Convertible Participating Preferred Stock, The issuance of our preferred stock, including the Series A Preferred Stock, could have the effect of decreasing the trading price of our common stock, restricting dividends on our capital stock, diluting the voting power of our common stock."
Ok, clear yet? AMC gave you a preferred unit with one voting right, but it also filed to issue 10 million preferred shares . Each AMC preferred share carries 100 voting rights. So 10 million times 100 equals 1 billion voting rights. They are also convertible into 1 billion common stock.Each share of Preferred Stock is initially convertible into one-hundred shares of the Company’s Common Stock upon the terms described below." 10.
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