AMC Entertainment Holdings (AMC:NYE) has reached a settlement in a shareholder complaint over stock conversion, resulting in a 22% decline in AMC stock shares during extended trading yesterday, while AMC Preferred Equity Units (NYSE:APE) gained more than 22%.
In February, the Allegheny County Employees’ Retirement System filed a complaint alleging that AMC expanded its share count without shareholder approval. As part of the settlement, AMC will be entitled to increase the number of authorised shares from 524 million to 550 million and implement a reverse stock split of 1 for 10.
The deal affords AMC the chance to enhance its commercial prospects and lower its substantial financial burden. AMC has experienced a reduction in profitability due to a decline in movie theatre attendance. The stock conversion will assist AMC in improving its financial standing and decreasing its debt.
The current consensus rating for AMC stock on Stock Target Advisor is Hold. The average price target of $2.15 suggests a downside potential of 57.9%.
Company Profile:
AMC Entertainment Holdings, Inc., through its subsidiaries, engages in the theatrical exhibition business. The company owns, operates, or has interests in theatres in the United States and Europe. AMC Entertainment Holdings, Inc. was founded in 1920 and is headquartered in Leawood, Kansas.
