AMC Entertainment CEO Adam Aron announced the possibility of a 1-for-10 reverse stock split.
Shareholders are wondering what this would mean for their investment.
The idea is to give shareholders the illusion of a higher share price by reducing the number of shares they hold.
The value of an individual’s portfolio would remain the same amount.
However, if an investor holds 10 shares of AMC, they will convert to 1 share.
If an investor holds 100 shares of AMC, after a 1-for-10 reverse split they will hold 10 shares.
All for the sake of making the value of AMC shares appear much higher.
With AMC currently trading around $4.90, a 1-for-10 reverse stock split would mean the stock will then trade at $49 per share.
This in turn makes AMC Entertainment less affordable for new retail investors to pick up, yet more attractive now while share prices are this low.
Buying 10 shares of AMC today for $49 will still be worth $49 during the completion of the reverse stock split, except you’ll only own 1 share instead of 10 shares.
CEO Says Shareholders May Convert APE into AMC
Adam Aron said on Twitter that there will be a shareholder vote to convert APE preferred shares into AMC common shares.
“Also, APEs worked exactly as intended to let us raise needed cash, buy back debt, explore M&A. But a huge discount in APE market price vs common stock must be addressed. We’ll hold a shareholder vote. It’s time to convert APE preferred into AMC common to eliminate that discount.”
This will essentially combine APE’s and AMC’s value together.
Is this a smart strategy?
Well, it definitely buys AMC Entertainment time.
Short sellers now have to short AMC from a higher price point and if investors chose to sell their stock, it wouldn’t take AMC to pennies like it could at current levels.
Opinion: Adam Aron is a master at pivoting.
There are no official dates yet to when shareholders will be able to vote on this proposal.
Leave your thoughts below
If you’re a shareholder, leave your thoughts below on these proposals.
Are you for them?
Do you think the CEO is making the best decisions for the company and its shareholders?
Leave a comment for the community to hear your thoughts.
Related: Adam Aron Address Falling APE Shares
Related: What a Reverse Stock Split Usually Signifies About a Company
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I was thinking along the same lines. How would you go about it using puts? Assume the vote is yes, how far before the vote would you dump your existing shares? What strike price would you chose for the puts? What expiration with a 3/14 vote in mind? Etc.
Conversion yes split well not sure yet on the fence
I THINK WE NEED REVERSE SPLIT TO HELP MOASS. BUT IT GIVES US LESS FIRE POWER TO KEEP THE MOASS GOING FOR A LONGER PERIOD. IF RETAIL INVESTORS OWN 1BILLION SHARES BIT NOW 100 MILLION MAKES A SHORTER AMOUNT OF DAYS TO COVER. IT CANT SQUEEZE WERE WE STAND NOW UNLESS ITS A RISK TO OUR FINANCIAL SYSTEM. SO THEY WILL DO WHAT EVER THEY CAN DO TO MAKE IT NOT SQUEEZE
Reverse Split definitely allows the share price to be higher. At the amount of shares of APE HAS NOW IF THE MOASS HAPPENS 1500 A SHARE MAKES IT THE LARGEST MARKET CAP IN HISTORY OVER 2 TRILLION
You’re absolutely right. Wish you would post this on Reddit!
Lol bud….. go back and explain to me how you compare completely and utterly different situations…… mechanics are not your strong point… paid shilling is…. bye bye 👋🏾
I say yes to it all been a ape since near the beginning. Came here to make money. Don’t give a shit about AMC it self only the shares and the squeeze. RS will put the price in the toilet. But APE will pop until then so I’ll play that arbitrage. Then dump it all just before rs sinks it, then it’s nothing but puts and shorts on AMC. You know the price after RS will tank, when you know something will happen in the market make money on it. Bet the farm, that’s the ape way, not to be married to a stock. Diamond hand only till it’s time to sell. Then get out. If a squeeze doesn’t come before RS it never will after. I’d hold forever sure but the shares that I bought won’t exist after RS. They’ll be some weird Frankenstein concoction that was cooked up not to make me money but to make AMC money.
Yeah, but our shares will be less so if they do cover, instead of us making more money the raise of our investment will be 10 times slower or lower. I did not sign up for that.
Even for a 1:10 reverse split? Are you kidding me? Reverse Split is always bad for any stock especially in the down trending market. I had 2 stocks reverse split and they still went under $1 in the process. The stock will still keep going down. The best solution is to just hold until the market picks up again. Even if the stock goes to $2 or even $1 as it did before they are not required to do a reverse split, instead retail will buy more shares as it is in a big discount. If they did a reverse split, no one will buy anymore.
I totally agree, leave it alone.
If we have 50% of the shareholders DRS (transfer) 50% of their shares to ComputerShare, we would force the squeeze but AMC apes contine to patiently wait for someone else to do something. Take away the infinite liquidity and lock the float.
I trust Adam Aron and I’m not leaving! I love AMC and I’m in it for the long run.
I am already so upside down with AMC….. I might as well dump it and get on my taxes this year for a loss and invest in something with dividends . I had another stock 10 to 1 reverse split …. yup should of dumped it , 24 hour later almost back to where it was at, 320 shares to 32 shares plus I had to pay fees……… Thinking AA used GME squeeze to suck retailers in to bail out AMC
Let’s find another meme stock – He is ready to drown us. Hypothetical, if you have 100 shares and it goes up 25¢ = $25
versus 10 shares that go up .50¢ = $5
Feeling pain for everyone who thought we had a hero – looks like we have to become our own
I’m by no means an expert but I think this RS AA is suggesting is not going to go well. For the last 18+ months, I have been seeing posts on various social media sites where AMC shareholders shout “manipulation” when price drops. I suspect the corrupt market will continue to attack the stock and of course, dilution to continue. I will even go this far that AA is going to get criticism for it.
Many of you will remember my Rant a few days ago, Where I basically beat Adam Aron up , Here is a reminder and what I think of this DIRT Bag Adam Aron has done everything he can to stop the AMC Squeeze, I mentioned he sold a shit load of shares during the run at $72.00 , then again when stock was starting to run at around $30.00 and gave us that load of shit Oh I am getting older need to think about my future when I retire and we bought that , then the stock dropped again to around $15.and started coming back right at $19 what did he do he Fucked us again with APE that was when LOU kept saying why now in his mind we were getting ready to squeeze and he kept asking people to write to Adam Aronto hold off for two months, npe he came with APE and he used the word POUNCE sold the idea it was a Bonus for us, 1 FREE SHARE OF APE for every share of AMC you had , He used the word Now is the time to Pounce, Bullshit a reward to us, Our AMC price dropped from around $19 to $12 Ape was $7 Look where Ape is now? Why did he give Citigroup the deal to sell APE knowing Citigroup was shorting AMC , This man is the devil , He once again is killing any possibility of a squeeze by allowing the shorts to use APE to cover ,
What do you think the will happen when this converts? The Shortys will have a ton of room to short it down. If I was Adan Aron I would have HEAVY security he is destroying I Mean Destroying MANY peoples lives who have borrowed money , maybe against there homes. Don’t tell me its there fault, they believed in him. We heed to boycott his theaters and strike in front of them , we can not allow this to happen quitely . Our Vote No , Means nothing , The HEDGE FUNDS THAT HE SOLD APE TO FOR basically nothing to cover there shorts, HAVE all the voting power, and he knows this . One again he stops the squeeze with a potential T-90 date coming , or the price low enough to cover like the first time. I welcome corrections for anything I said.
PS If you think shorts must cover , Do me a favor and go look at MMTLP , Finer saved the shorts and screwed retail. Then look at COSM, lol still waiting for shorts to cover after there Reverse split and Company name change.
All valid points. I’m so mad at myself for letting myself get suckered in to AA bs. This dirtbag never wanted this to squeeze and now I’m down a lot. This game is rigged and we’re not given a fair chance.
No. Why would any CEO want a squeeze for their company? Consider if the squeeze did occur as planned. Everyone would have made their bank? And then, sold the stock. The stock price would be left devastated, and they’d still owe whatever it is they owe. Never trust a CEO. Their #1jl job is to protect the business, and make profits. This plan with APE was to bail out the company and finance whatever acquisitions or updates they needed. It was never about the shareholders. A RS solidifies the plan. They’ll consolidate the shares and if it is something like $45 then it will be out of reach for most. RS are always a bad thing.
You are so full of crap… literally a walking contradiction…. APES are too smart to listen to your cum guzzling
Spot on I would agree fully the elites enriching the elites it’s sickening to have to watch the corruption and no justice for the average investor. Revolution is coming the pitch forks and torches are inevitable
Exactly
I don’t know English, I’m using Google translate, what I see is that AMC CEO Adams Aron, everything he does is for his own benefit, I don’t think he’s thinking of the faithful saviors of the company that are all of us who are apes who we remain firm buying and holding, my vote is NO for that proposal, and my feeling is to continue buying and holding, and with the feeling of continuing here and not leaving thousands of Apes, the shorts are going to have to cover sooner or later early.
As a shareholder my vote would be no. We have been waiting for a squeeze for 18 months and to go from 2000 shares (at $55 per share) to only 200 shares is bullshit. Absolute bullshit. The short squeeze would have to hit $550 per share for me to break even. Adam Aron must do better and fast.
Will you vote ‘YES’ or ‘NO’ to the stock split? Vote here: https://twitter.com/FNez_Blogger/status/1606045626361270272
The split would only come after a conversion so it would be with AMC not APE, Per AA tweets…. It would be nothing but beneficial for shareholders…. It is not a ploy, it is not a ruse, but a gift to loyal shareholders….
What shills are going to do is spin this negative. As well, they will attempt to have you vote no for a conversion which makes no sense because that was the plan from the beginning as AA has always stated… It will inevitably, and undeniably make shorts close… Upon conversion, Cusip numbers change… Upon Cusip numbers changing, shorts HAVE TO COVER!! No exceptions… NONE!!! #WeKnow #CHECKMATE $AMC $APE
@ericapecuttill I am going to try an be polite, you are misinformed , if you think the shorts have to cover . Some how they will be saved Just go look at MMTLP and Look at COSM, before you fire back at me.
Thanks
If I only own ape, does it convert to amc.
If you only own APE you don’t know what you are doing….. But I don’t believe that you even own that… soooooo.
IF, meaning what happens
It all converts to AMC upon vote
Well, I’m already deep in the shit, might as well go as deep as possible. If the market is heading towards a recession, it is possible that the price of a company’s stock could go down after a reverse stock split because investors become more cautious and may be less likely to invest in high-risk stocks. However, it is important to note that a reverse stock split is not a guarantee of the stock price going down. A reverse split could make AMC more attractive to investors as it improves AMC’s image, and could potentially increase AMC’s liquidity.
Not a good idea for us little guys for the split but would be good to transfer ape into amc
hell no , why would we give them space to drive us down again… the manipulation is well known now so lets let the system force the squeeze.
Exactly Mike there are so many things wrong with this picture.
If I have 60 shares I purchased at $50 and now I have 6 shares the 6 shares need to be worth $500 apiece to break even. The math is not working for me. I understand the concept but that leaves the little guy not as apt to purchase AMC.
Its all to you benefit… because just like the conversion from ape to amc, a reverse split changes cusip number…. meaning close of shorts is mandatory across the board… close when conversion and close when reverse split… anyone voting no on anything means they are a paid shill or they dont know about cusip numbers and the relationship it has when reverse splitting….
Va a acabar de hundirnos, que tontería más grande privar a los minoristas de poder comprar acciones. Este hombre sólo trabaja para su beneficio. Ya es suficiente hablar bien de un CEO que es igual que un fondo de cobertura
Translation : It’s going to end up sinking us, what a big foolishness to deprive retailers of being able to buy stocks. This man only works for his benefit. It’s enough to speak well of a CEO who is just like a hedge fund
Translation means:
It’s going to end up sinking us, what a big foolishness to deprive retailers of being able to buy stocks. This man only works for his benefit. It’s enough to speak well of a CEO who is just like a hedge fund
Let’s start a discussion! Leave your thoughts below.
I trust Adam Aron 100%
Moron that mentality got the average investor in this mess
100% as well. I will vote yes to all proposals by AA