Hedge fund CEO Bruce Richards now says he’s ‘super bullish’ on AMC’s new APE conversion as the proposed rule is expected to go into effect next Thursday.
Bruce Richards is the CEO of Marathon Asset Management, which manages a family of investment programs focused on credit strategies including hedge funds, managed accounts, single-client funds and collateralized loan, and debt obligation vehicles.
Richards is rather enthusiastic about AMC Entertainment’s ability to raise as much as $8 billion, though he states his team thinks $1 billion to $2 billion is more realistic.
“I wouldn’t worry about the writers strike, and the box office numbers look like record numbers to us, and greater than pre-covid number, in terms of revenue, so, we’re super bullish, but think about that,” he told Squawk on Tuesday.
“We can make a +17% return, +10% on the cash, and the +25% price pop on price, and we can make this return, we think it’s a high tang return for taking senior bank debt risk in a very top of capital structure of AMC. We think the smartest play for AMC is actually buying the bank debt which is going to parr, which is offering these staggering returns for the unit of risk that you’re taking.
Richards says that AMC is great company and joked that he tried to get in to see Barbie and Oppenheimer but that he was turned away at the door twice due to tickets being sold out.
“I will go before the summer is over, I promise”, he stated.
On Tuesday, AMC stock rose more than +8% while APE shares rose nearly +2%.
Richards’ optimism certainly brings forth an excitement that hasn’t been seen in quite some time.
Will this APE conversion trigger an AMC short squeeze? I’m curious to know what you think.
AMC Speaks on Short Sellers Covering Prior to New Conversion
AMC Entertainment is answering questions on short sellers covering prior to its newly approved conversion proposal.
Shares of the company fell more than -30% after hours last Friday as APE shares rose +30%.
On Monday, AMC stock fell more than -33% while APE shares rose nearly +18%.
Will short sellers be required to cover their positions before the Reverse Stock Split and Conversion?
According to AMC’s new 8-K filing, AMC expects that the deliveries under stock borrowing arrangements will be adjusted in the regular way to account for the Reverse Stock Split or, in the case of contracts on APEs, the Conversion.
However, AMC states that it “does not determine and is unable to provide interpretive advice on the impact of these events on the contractual terms governing stock borrowing arrangements.”
How will short sellers be affected by the Litigation Settlement Payment?
“AMC does not determine and is unable to provide interpretive advice on the impact of the Litigation Settlement Payment on the contractual terms
governing stock borrowing arrangements.”
AMC’s reverse stock split will go into effect on Thursday, August 24.
The conversion of APE shares into AMC common stock will occur the following day, Friday August 25.
The litigation settlement will then take place on Monday, August 28.
Will there be large failure-to-deliver (“FTDs”) like when the APE was distributed?
AMC Entertainment states that while they cannot predict the trading impact of these corporate events, given the significant transactions that will occur over successive trading days, it is possible there will be large FTDs like when the APE was distributed.
Also Read: Goldman Sachs Gives AMC a New Price Target of $175
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About The Author
Imho, the rs and ape conversion is a clean up operation for the counterfit amc shares which have been sold for 3 years now with wild abandon. Stakeholders beyond the millions of hard working retail investors who will be pillaged from their chance for a short squeeze, are aa and the board, the big and small hedgies, the market makers, citibank, overseas companies based in the usa absolved from stock settlement, the 500 million Brazillian amc etfs, the sec with their settlement rule specifically for 13 days on the ftd list and we are up to now I think 36 days!, finra, the dtc, and the dozens of brokers that met incoming amc buy orders with “i got cha”. Lets not forget sam bf and the ftx tokens, and a sus chancelory court allowing a backed investor to spend a half a million dollars on legal fees to protect amc holdings in the small thousands. Corruption to the core. Have been an active amc HOPIUM INVESTOR since pretty much the beginning. Chronicled with spicy bits of news sources and youtube follower videos in a website I made for posterity at apeMOASS.com
Like millions of other disillusioned apes, I am saying goodbye to corrupt wallstreet after this fiasco…
May we all live in interesting times…
I am ape MoonshotTed.com
(All of above is just my opinion and as always, not legal advice.)
I agree on you … furthermore I think hey are waiting till the very last moment to cover if needed, most probably after the merge and RS … AA fooled all of us retail investors who actually saved AMC, that’s definitely bitter. Only thing I don’t understand yet why ape isn’t bought up to the level of AMC in 3/4 SP area … must be they have even bigger plans to scr*w us. Let’s never forget that AA sold APE in August 22 to us as an extra dividend for free, a bonus for us “pouncing” … truth is that by intro APE, 40% of value of AMC was taken, and APE was directly taken down … due to dilution … thank you AA and management, hopefully one day you can explain that action in court
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