AMC’s Stock Conversion Is Over But Strategists Predict More Dilution

On Friday, the company converted AMC Preferred Equity units, or APEs, into common shares, ending a lengthy battle after some common stockholders had tried to block the move. A day earlier, the company completed a 10-to-1 reverse stock split.

“AMC will likely do a large capital raise to improve its liquidity position,” Colpitts said. One way the company might raise money would be to sell shares at the market price over time, known as an at-the-money offering, he said. A successful equity raise could help AMC pay down debt and stabilize its finances. The movie theater operator has about $9.5 billion of short- and long-term debt on its books, and although it eked out about $8.6 million of net income in the second quarter, before then it had posted losses every period going back to the third quarter of 2019.

Wedbush upgraded its rating of AMC to neutral from underperform, with a new price target at $19 this week.

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