AMC adheres to the dividend plan for shares with ticker 'APE'.

(Bloomberg) — AMC Entertainment Holdings Inc . announced a special preferred stock dividend as a “reward” to its investors. Shareholders didn’t take it that way.

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Adam Aron, CEO of the world’s largest cinema chain, said the new financial instrument would be similar to a stock split. Still, AMC shares sank 11% in late trading on the news. The AMC may issue more of the preference shares which, when converted into AMC shares, would dilute the existing holders.

For now, investors will receive one share of the new preferred stock, which Aaron says is aimed at “recognizing our passionate and supportive shareholders.” The preferred shares, which will be listed on the New York Stock Exchange under the ticker “APE”, will be convertible into AMC shares if authorized by the company and investors. Investors rejected efforts to issue 25 million new shares last year.

Aron said the company may authorize additional preferred stock in the future to reduce debt, make international theater acquisitions or even pay off debt to landlords.

“We now have stock that we can use the way we could use common stock if it were available to us,” he said in an interview. Although the company had authorized the issuance of preferred shares in 2013, it waited until now to use them because of the outcome of a shareholder vote last year, he said.

The monkeys are called the wave of small investors who have dived into AMC shares during the pandemic. The dividend will be paid at the close of business on August 19. The company is also offering an “I OWN APE” non-fungible token that will be distributed to the 765,000 members of its AMC Investor Connect program, a way to stay in touch with shareholders.

The company reported a loss of 20 cents per share, excluding certain items, better than the 24 cents loss expected by analysts. Revenue doubled to $1.17 billion, matching estimates.

AMC is still reeling from a complete collapse in revenue in 2020. Although ticket sales are improving, the chain fell short of the $1.5 billion in sales reported in the second quarter of 2019, before the pandemic began. AMC sold 43.5 million tickets in the US in the second quarter, compared to 71.9 million tickets sold in the second quarter of 2019.

Still, ticket sales more than doubled from a year earlier, helping bring revenue closer to pre-pandemic levels. AMC also relies on higher prices to generate more cash. Major films including Doctor Strange in the Multiverse of Madness and Top Gun: Maverick helped drive customers to theaters in the second quarter.

Aron said he expects a slow period in the current quarter while new releases such as the Black Panther and Avatar sequels arrive later in the year. However, he said he was looking forward to the fourth quarter and all of next year “with absolute joy.”

Aron has made unusual moves in the past, including buying a 22% stake in Hycroft Mining Holding Corp. in March. AMC said it has written down some of the value of this investment but still believes in it for the long term.

At the company’s 2022 annual meeting, shareholders on an advisory basis rejected Aron’s proposed $19 million pay package.

AMC shares fell nearly 8% to $17.05 in extended trading after the results were announced. The stock had fallen 33% this year by Wednesday’s close in New York, compared with a 13% drop for the S&P 500.

(Updates with CEO comment in fifth paragraph.)

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