AMC Collapses, Proposes Reverse Stock Split

By Willard Hughes, The Chicago Times

December 23, 2022

KANSAS CITY, MO – AMC Entertainment’s stock collapsed Thursday after the company announced a new $110 million capital raise and a proposed reverse stock split.

AMC stock was halted briefly after the opening bell as it hit a new 52-week low and was down 15% in mid-morning trading on Thursday.  AMC also announced its plans to sell its APE (Preferred Equity) units to Antara Capital LP at a weighted average price of 66 cents a share which should reduce its debt load by $100 million.

“Clearly, the existence of APEs has been achieving exactly their intended purposes. They have let AMC raise much welcomed cash, reduce debt and in so doing deleverage our balance sheet and allow us to explore possible activity,” CEO Adam Aron said in a news release.

The proposed reverse stock split of AMC common shares at a 1-to-10 ratio will require a special shareholder meeting to approve the reverse stock split and the conversion of APE units into AMC common shares.

AMC, the world’s largest movie theater chain, has been working to lighten its heavy debt load, which grew during the COVID pandemic when theaters were forced to close along with the movie industry’s lack of productivity.

In November, the company reported another quarterly loss due to higher operational costs.  Despite higher revenues and cash on its balance sheet, AMC is still spending more than it makes each quarter on operations.  According to AMC, it shed $179 million in cash during the third quarter.