Why AMC Shares Are In Freefall Premarket Today
Portfolio Pulse from Shanthi Rexaline
AMC Entertainment Holdings, Inc. (NYSE:AMC) shares slumped in premarket trading following the Delaware Chancery Court’s ruling that the company can increase the number of authorized shares and do a reverse split of the shares in the ratio of 1-for-10. This will allow conversion of all outstanding AMC preferred shares (APE) into AMC common shares. The move is expected to dilute equity capital, pushing down the stock price. In premarket trading, AMC shares traded down 27.38% at $3.82, while the APE preferred unit jumped 26.40% to $2.25.
August 14, 2023 | 10:25 am
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AMC shares are expected to be negatively impacted by the court ruling allowing an increase in authorized shares and a reverse split. This will dilute equity capital, pushing down the stock price.
The court ruling allows AMC to increase the number of authorized shares and do a reverse split. This will result in a dilution of equity capital, which increases the supply of shares and pushes down the price. As a result, AMC shares are expected to be negatively impacted in the short term.
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