APE shares rose more than 75% on Thursday.
Volume skyrocketed past 177.6 million, up 158 million in trading volume from its average of 19.6 million.
Shares rose from $0.67 its previous closing day to $1.20.
The equity is currently up 5% after hours.
So, what happened?
And can we expect APE shares to continue rising?
Let’s discuss it.
Join the newsletter to receive weekly updates on your favorite stock tickers, straight to your inbox.
Or follow me on Twitter for daily posts.
The Latest on APE Stock
APE stock (AMC’s Preferred Equity) has been the topic highlight since its inception earlier this summer.
AMC Entertainment was able to raise several million dollars from the equity to pay down its debt.
The price of the equity has since come down drastically as short sellers piled in forcing share prices to a low of $0.65.
And just as the possibility of the equity merging with AMC is announced, APE share surge more than 75% reaching $1.20.
CEO Adam Aron announced on Twitter today that there will be a shareholder vote to convert APE equity to AMC common shares.
He also commented on the possibility of a 1-for-10 reversal stock split for AMC stock.
It’s the biggest news in the AMC community thus far.
So, why did APE shares rise so much today?
And where did so much trading volume come from?
Retail investors are speculating insider buying triggered the massive price surge and heavy volume.
Others are alleging it’s the company’s way of injecting value back into the equity before APE re-merges with AMC common stock.
The truth is, it’s hard to say.
APE was never intended to be a valuable asset for investors, but more so a valuable asset for AMC Entertainment as a company.
Will APE Shares Keep Rising?
If insiders are injecting the equity with value before shareholders vote for the merge of APE and AMC, then it’s very possible the equity may continue to rise.
As of right now, where the immense amount of volume came from is undetermined.
What’s certain is many shareholders weren’t too happy about the creation of APE in the first place as it created unnecessary loss for shareholders.
Here are the CEO’s comments published on Twitter:
“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.”
APE shares have been massively shorted to cents, AMC stock is now trading below $5, a solution has to be addressed.
And so it has.
Adam Aron is proposing a 1-for-10 reversal stock split where shareholders will get left with 1 share of AMC for every 10 shares they hold in exchange for a higher share price.
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 $4.50, a 1-for-10 reverse stock split would mean the stock will then trade at $45 per share.
Leave your thoughts below
I’m curious to hear your thoughts on what’s currently occurring with AMC Entertainment and its APE shares.
How do you feel about the entire situation at hand?
Leave your thoughts below for the community to see.
Related: Adam Aron Address Falling APE Shares
About The Author
I agree with all of the above comments. As a retail customer, I have held my shares, through the ups and downs of this stock. Then split the stock to include APE, so the company can use the APE proceeds for the good of the company!!
Is holding AMC & APE stocks going to end up with retail buyers discovering they got screwed by the company they were trying to save!!
It all fits the narratives of the last 2.5 years.
WHAT HAPPENED TO THE “SQUEEZE “, “TO THE MOON”, 1, 2, 3 THOUSAND PER SHARE…
DID WE “RETAILERS” GET HOODWINKED?
Not a happy camper.
Sounds like an opportunity to purchase shares dirt cheap before it goes parabolic.
I thinknits another bullcrap smokescreen to hide what AA is really doing- taking the side against retail.
Aaron says, “APEs worked exactly as intended to let ‘us’ raise needed cash, buy back debt” – If all was exactly as intended then crushing the one who pulled the company out of the dirt was a terrible way to show gratitude. It was deceptive and now the new 10 for 1 only makes it unaffordable to to buy enough to have any affect on market movement, or own enough shares to capitalize on market movement. First forced to have APE, striped value now, take AMC out of our reach – unless he does something that proves otherwise, he’s not concerned with the turning original Apes into carnage. I’ll find another stock and sell all my AMC before I accept another forced bad deal.
No one forced you to keep APE you could have sold. It’s your portfolio and your responsibility, so stop blaming others. Adam Aron has done great things for AMC. If you don’t believe in AMC and a free market then by all means, sell your shares and fk off Linda.
What effects would a split reverse have on short sellers hoping for the stock to hit $1? How does this work for shorting? Does this mean the shirts would have less stock to buy back but at a higher price?
Screws everyone with a higher average. If ur average is 10, ur new average will be 100 with little to no chance of making ur money back
Let’s start a discussion! Leave your thoughts below.