AMC Lawsuit to Be Resolved in Late June

Market News Daily - AMC Lawsuit to Be Resolved in Late June.
Market News Daily – AMC Lawsuit to Be Resolved in Late June.

The AMC Entertainment (NYSE:AMC) lawsuit is scheduled to be resolved sometime in late June.

A Delaware court is targeting June 29-30 for a hearing to consider the proposed settlement between AMC and plaintiffs regarding the conversion of APE equity into class A common shares, share issuance, and a 1-for-10 reverse stock split.

The approved proposals will allow AMC Entertainment to raise capital to pay down its debt and use cash towards other business ventures and ideas.

“Some misunderstand the 1-for-10 reverse stock split, approved by 87% of March 14 votes, saying we are “stealing 90%” of your shares. You forget that the share price rises 10-fold at that time. EXACTLY the same as trading ten $1 bills for one $10 bill. Either way, you have $10.”

Investors are questioning why go through a reverse stock split in the first place if ‘nothing’ truly changes.

“In your comments, some fear that after a RS, short pressure could cause price to go back down. But you neglect that it is EVERY bit as easy to short a stock priced at $3.00 as it is on a stock priced at $30. A RS itself has NOTHING to do with any subsequent prices afterwards,” said the CEO on Twitter.

But there are more details shareholders should know about the proposals.

One of the biggest being how much more challenging it’s going to be to break even or become profitable at such a high share price due to the RS.

And the biggest risk of course is if share prices fall back down to current levels through heavily manipulation of the stock as we’ve seen for the past two years.

Latest AMC Lawsuit Update

Vice Chancellor Morgan Zurn was set to consider the proposed settlement in early April that would allow AMC to move forward with its conversion plan.

However, it seems this case might be bigger than we thought.

“I think it’s going to be almost impossible to do this in less than 60 days, given the stockholder interest that we anticipate,” Zurn said.

The judge was open to “getting this wrapped up by the end of June,” tentatively suggesting June 29 or June 30 for a settlement hearing.

AMC stock closed up nearly 4% on Tuesday to $5.15 while APE shares fell more than -6.5% to $1.42.

This is a developing story – join the newsletter below for the latest AMC stock news and updates.

Related: Antara Capital Discloses Shorting AMC Entertainment Stock

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Market News Today - AMC Lawsuit to Be Resolved in Late June.
Market News Today – AMC Lawsuit to Be Resolved in Late June.

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