AMC Entertainment officially becomes “APE” in an effort to further solidify its financial future as a major competitor Cineworld says it is exploring bankruptcy.
The company’s new share class — called APE in deference to the retail investors who fueled the stock during the COVID-19 pandemic and commonly call themselves monkeys — is scheduled to begin trading on the NYSE sometime today. The ticker symbol will be $APE.
One unit of APE will be granted for each common share, meaning that approximately 517 million shares will be formed from this new stock.
AMC shares fell more than 30% in premarket trading on Monday.
AMC Entertainment CEO Adam Aaron told Yahoo Finance Live (video above) that the company’s new AMC Preferred Equity (APE) shares should dispel fears that the movie chain could cripple under the weight of debt accumulated during the COVID-19 pandemic.
“This removes the risk of survival in the near future,” Aaron said. “So we can raise money if we need it. This is good for our shareholders.”
Aaron added that this latest smart move (the other being the gold mine AMC bought earlier this year) will help AMC raise money to reduce debt and look at acquiring more movie theater chains.
“The other thing it allows us to do is raise capital for growth, raise capital for M&A activities and raise capital to pay down debt,” Aaron said. “These are all good things for AMC. That, combined with an improving box office, recovery from the terrible pandemic of 2020 and the start of 2021, these are good days for AMC.”
Aron said the company could theoretically list five billion APE shares based on what was approved by shareholders in 2013, but added that it had no plans to do so.