AMC Entertainment Holdings (NYSE:AMC) shares plummeted ahead of the cinema chain’s conversion of its AMC Preferred Equity (APE) units into common stock on investors’ concerns about the dilutive impact of the move.
The last trading day for APE shares will be Thursday, the same day AMC is also carrying out a one-for-ten reverse stock split, ahead of their conversion to common stock effective Friday.
The share conversion comes after AMC was sued for allegedly rigging a shareholder vote that would allow the conversion and issuance of hundreds of millions of new shares.
However, a revised settlement was approved by a Delaware judge last week which sent AMC’s stock into a downward spiral.
AMC shares have lost more than half their value, about 62% as of Wednesday morning, since the APE conversion got the go-ahead on August 14.
After finishing 18.3% lower at Tuesday’s close, the stock had fallen a further 22.7% to US$1.98 in pre-market trade on Wednesday.
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