finally giving the “monkeys” what they want. The movie theater company paired its second-quarter earnings report with news that it was giving shareholders a special dividend on AMC Preferred Equity Units.
AMC’s preferred stock will trade on the New York Stock Exchange under the ticker “APE” beginning August 22. AMC (ticker: AMC ) said it will issue 516.82 million APE shares — one for each outstanding share. The preferred stock will be convertible into common stock, but only if AMC shareholders vote to increase the number of common shares authorized. Last year, AMC withdrew a request to shareholders to increase its potential share count, citing a lack of support among investors.
The Wall Street Journal, citing a person familiar with the matter, said the preferred equity units would allow the company to circumvent restrictions on the sale of common stock. The firm may sell an additional 4.5 billion APE units after giving away the initial 517 million, the Journal noted. AMC struggled amid the pandemic, selling millions of shares in 2021 to help stay afloat while theaters remained closed.
The special dividend will go to shareholders of record on August 15 and will be paid at the close of business on August 19. The ex-dividend date is August 22. If you sell your AMC shares between Aug. 16 and Aug. 22, the person you sold to is entitled to the preferred shares, although AMC suggests investors trading during this period check with their broker.
A dividend for shares or non-fungible tokens is a popular demand among some AMC shareholders on sites like Twitter and Reddit. Such users who call themselves “monkeys” often spread conspiracy theories about fake AMC and
shares. The Journal, citing a person familiar with the matter, said the company hopes the dividend, which will be given to legitimate shareholders, will put such fake stock theories to rest. Shareholders of AMC’s investor connection site will also receive NFTs.
An AMC spokesman did not return a request for comment on the Journal’s report.
AMC CEO Adam Aaron in the announcement called the preferred dividend exclusively for shareholders “perhaps the largest action we will take in all of 2022 to fundamentally strengthen AMC over the long term.”
“This new AMC Preferred Equity gives AMC currency that can be used in the future to strengthen our balance sheet, including by paying down debt or raising new equity,” Aaron said. “As a result, this dramatically reduces any near-term risk to AMC’s survival as we continue to work our way through this pandemic.”
AMC also reported a second-quarter net loss of $121.6 million, or 24 cents per share, on revenue of $1.2 billion. Analysts had expected sales of $1.17 billion, according to FactSet. The firm’s non-GAAP net loss was 20 cents per share, beating consensus estimates for an adjusted loss of 23 cents per share, according to FactSet. Aron noted that its investment in Nevada gold and silver miner Hycroft Mining (HYCM) has resulted in write-downs. Hycroft shares fell more than 48% in the quarter.
Aron noted that AMC’s global attendance reached 59 million people, up 168% from the second quarter of 2021. He also said that food and beverage revenue per patron was $7.52, up from $5.58 in the comparable pre-pandemic quarter of 2019.
AMC shares were down 4.9% in after-hours trading.
Write to Connor Smith at [email protected]