AMC Will Now Distribute a New 13% Cash Dividend

AMC Entertainment (NYSE:AMC) will now distribute a new 13% cash dividend to investors for every share they hold — part of its settlement obligations.

Under the settlement, AMC will provide stock worth an estimated $129 million to common shareholders to settle the legal claims related to its stock conversion plan.

The company announced that it will distribute approximately 0.133333 AMC Class A Common Shares per every AMC share held with the record date being Thursday August 24 and the payable date being Monday August 28.

AMC Entertainment will also be effecting a 1-for-10 reverse stock split on Thursday August 24.

It’s important to note that AMC’s new 13% cash dividend is a one-time distribution and should not be mistaken for a traditional and recurring cash dividend as offered by other companies quarterly or annually.

Note: 7.5 * .1333 = .99975 | The dividend is a 13.33 PERCENT DIVIDEND. You get 1 share for every 7.5.

“This is a reminder about the upcoming AMC dividend distribution.

• Payment amount per share $13.3333 PCT (Percentage)
• Payment date August 28, 2023
• Record date August 24, 2023
• Ex-dividend date August 23, 2023

You will receive the dividend payment if you hold AMC prior to the ex-dividend date and do not sell AMC until on or after the ex-dividend date.

Regular cash dividends will be reflected in your account on the payment date. Stock dividends and dividend reinvestments can take up to five business day,” the company said in an email to shareholders.

Short interest for $APE has risen +50% in the past month indicating a major interest for short sellers.

Common stock also continues to be heavily shorted with cost to borrow rising as high as +1,000%.

On Tuesday, AMC stock fell more than -20% while share of APE fell more than -14%.

Investors are expressing concerns on social media as the company continues to take a hit.

Also Read: AMC Speaks on Short Sellers Covering Prior to New Conversion

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AMC CEO Speaks on Short Thesis in New Letter

In late July, AMC CEO Adam Aron released a statement on his thoughts relating to the short thesis in AMC Entertainment.

“AMC must be in a position to raise equity capital. I repeat, to protect AMC’s shareholder value over the long term, we MUST be able to raise equity capital.

That is especially the case now with the added uncertainty caused by the writers and actors strikes, which could delay the release of movies currently scheduled for 2024 and 2025.

If we are unable to raise equity capital, the risk materially increases of AMC conceivably running out of cash in 2024 or 2025, or of AMC being unable to satisfactorily refinance and stretch out the maturity of some of our debt (which is required of us beginning as early as 2024.)

The risk of financial collapse is not whimsical. Cineworld/Regal, the second largest movie theatre chain in the world, fell into bankruptcy and their equity holders were essentially wiped out. Bed, Bath and Beyond which was viewed as the third most watched meme stock, also fell into bankruptcy and their equity holders also were essentially wiped out.

Fortunately, at AMC, we have been much smarter, much more agile and much more skillful. We have risen to every Covid challenge heretofore, and I have every confidence in our continued ability to successfully navigate through these complicated times,” Adam Aron said in his letter.

The best way to eliminate the Wall Street short thesis according Adam Aron is by successfully growing the company’s fundamentals.

“AMC Entertainment must put ourselves in a position to be able to raise equity capital.

That is what will make it more likely that first we survive and then that we thrive. Indeed, over the last several years, there has been an enormous short share position in AMC stock.

In my view, the wisest way to defeat that short thesis is to take bankruptcy risk off the table, to the extent possible.

And we do that by AMC being able to raise equity if, as and when needed.”

Also Read: Two Institutional Investors Have Now Increased Positions in AMC

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