AMC Entertainment (NYSE:AMC) is now facing a new lawsuit from an investor non-related to the APE conversion case.
The lawsuit in Delaware’s Chancery Court seeks an order compelling the company to hold its first general shareholder meeting and board election in about 13 months.
Two board members appointed as replacements in January are overdue to face an initial investor vote, according to the complaint filed says Bloomberg Law.
Investors and arbitragers are separately waiting for a final decision on another lawsuit that seeks to prevent AMC Entertainment from converting its AMC Preferred Equity (NYSE:APE) into common stock, as well as a 1-for-10 reverse stock split.
In February, Allegheny County Employees’ Retirement System filed a lawsuit against AMC Entertainment claiming that the company and several of its directors violated state law to “eviscerate” the voting power of common stockholders, who had not supported issuing new shares.
The new AMC lawsuit was filed by Kevin Barnes, who’s allegedly record holder of 111 Class A shares and the same number of APEs.
Barnes also beneficially owns an unspecified number of additional securities and derivatives that he holds through brokerages, according to the complaint.
The suit cites a state law that authorizes Chancery Court judges to “summarily order a meeting to be held upon the application of any stockholder or director” if one hasn’t been scheduled in at least 13 months.
AMC’s last annual meeting was June 16, 2022, according to the complaint.
Barnes is represented by Ballard Spahr LLP.
The case is Barnes v. AMC Ent. Holdings Inc., Del. Ch., No. 2023-0718, complaint filed 7/17/23.
Other Recent AMC Entertainment News
AMC Entertainment’s short squeeze score has now jumped to 96 according to Ortex data.
‘Short Score’ uses a multi-factor model that incorporates multiple short-related metrics, with a higher score indicating that the stock is heavily-shorted and has other characteristics that increase the possibility of a short squeeze occurring.
AMC’s short squeeze score has been between 93 and 94 all year.
Last week it went up to 95.
Now AMC’s short squeeze score has jumped to 96, an indication that a short squeeze probability continues to grow.
AMC’s current short interest is sitting at 28.03% which is much higher than the short interest the company had in 2021 when shares exploded between $6 -$9 per share to its all-time high of $72 per share.
The analytics firm has also listed the world’s largest movie theatre chain on its top 10 list of most likely ‘short squeeze candidates’.
But Ortex isn’t the only firm alerting short squeeze signals from AMC Entertainment.
“As the broader stock market has been on a tear for about a month, things are looking grim for investors with big short positions in stocks like AMC Entertainment Holdings Inc. and GameStop,” said Ihor Dusaniwsky, head of predictive analytics at financial technology and analytics firm S3 Partners.
“One factor that is also killing profits for short sellers is the borrowing costs on stocks that no one is willing to part with,” he continued.
Short sellers paid $1.91 billion in short borrow fees during the first quarter of 2023, according to S3 Partners.
AMC stock is up more than +11% this year-to-date, but down more than -73% in the past year.
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