AMC Entertainment Holdings disclosed late Monday that it had reached a settlement that will let it go ahead with plans to convert is AMC Entertainment Preferred shares into common stock. The news sent AMC stock plunging and APE stock soaring after hours.
AMC Entertainment, in its SEC filing, disclosed a binding settlement with plaintiffs in the shareholder lawsuit regarding the movie theater chain's stock conversion plan. Plaintiffs will get common shares. In return, AMC and the plaintiffs will request that a "status quo order" be lifted, allowing for the conversion of APE stock into AMC stock.
AMC also will be allowed to carry out a 1-to-10 reverse stock split and have the right to sell more shares.
Lifting the status quo order still needs court approval.
AMC Entertainment issued AMC Preferred as a way to raise more capital without directly issuing more AMC common shares.
Early Tuesday, AMC stock dived 23% to 3.91, not far from January's two-year low of 3.77. APE stock popped 13.5% to 1.68.
In theory, APE stock should be worth the same as AMC stock.
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