AMC shareholders are wondering how much APE stock will be worth.
The dividend was announced during AMC’s 2022 Q2 earnings call and has received a lot of attention.
But there seems to be a lot of misinformation going around regarding the dividend, as well as some hard truths.
In this article I’m going to break down how much APE stock will be worth and what shareholders can expect in the coming weeks for AMC.
Let’s get started!
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Who will receive APE Stock?
AMC shareholders will receive 1 APE stock for every 1 share of AMC they hold at the end of the trading day of August 15th, per AMC’s press release.
Shareholders should see the new dividend stock reflect in their broker accounts the following week by Monday the 22nd.
APE stock is not a cash dividend which means shareholders will be able to trade the security like any other stock.
“These 516,820,595 new “AMC Preferred Equity units” will trade on the New York Stock Exchange with the symbol APE”, said CEO Adam Aron in a tweet earlier this month.
Shareholders who sell AMC stock prior to the closeout date will not receive APE stock upon the issue date.
Will APE expose synthetic shares?
There is a 50/50 chance APE stock will expose synthetic shares.
The reason being is that AMC Entertainment has already issued the 516.8 million equity units per outstanding AMC shares.
This means that the equity units already belong to every individual shareholder.
The problem will arise only when AMC shareholders do not receive APE stock.
If AMC shareholders only receive partial APE securities, then brokers will need to address the issue at hand.
An incomplete batch of APE stock could signify shareholders are indeed holding phantom shares.
But how likely is this scenario?
It’s very unlikely since naked shares tend to be transacted outside the lit exchange and are not traceable/recorded for the public.
Here’s what the CEO had to say regarding synthetic shares upon the announcement of this new equity unit.
The preferred equity dividend will go ONLY to company issued shares so if there are institutions holding synthetic shares, they will simply not receive APE.
How much will APE Stock be worth?
No, APE stock will not be worth $0.01 as many thought per AMC’s press release.
Adam Aron confirmed the “$0.01” referred to be merely a ‘placeholder’ used for technical legal terms.
APE stock will be worth approximately 50% of where AMC shares traded just before the dividend.
From there, market trading conditions will determine the ongoing share price of APE stock.
This means that if AMC traded at $25 per share before the dividend goes into effect, shareholders will see both AMC and APE stock reflect $12.50 per share each.
The value of AMC shareholders’ portfolios will not change but rather be divided in half by these two securities.
In other words, the value will be the sum of 1 AMC share plus 1 APE.
What’s up with Dilution rumors?
Is APE stock diluting AMC shares?
Yes and no.
While AMC shares are not being diluted, the introduction of APE stock allows the company to use half of the value of AMC shares to raise capital and pay down debt if they choose to.
Since shareholders have expressed they do not want to dilute AMC anymore, AMC Entertainment’s solution was to create a separate security (APE) from which they could use instead.
For the company, it’s a great fundamental move.
For shareholders, it means giving the company access to half of your capital.
Good or bad, this will depend on what the company means to each individual shareholder of course.
Some will be happy to play such an important role in the company’s growth and fundamentals, others not so much.
Many AMC shareholders purchased the stock to make money from a short squeeze so naturally there could be concerns.
Still, short sellers are betting against a company who are great at business and at raising capital, which is not ideal for them.
AMC Entertainment has proven time and time again Wall Street cannot stop their progress, growth, and innovation.
And where there are short sellers, there is a squeeze potential.
Final thoughts
Investors who purchased AMC stock to make some serious money must check-in with their conviction.
Although AMC’s share price will be divided in half, it will be up to investors to identify whether squeezing short sellers is still a priority.
And if it is, then APE stock should only be seen as another fundamental power move by the company to combat Wall Street opps (opposers).
Money should always be circulating, and that is what AMC Entertainment is successfully doing.
The question is, how will you as an investor allow your money to circulate and work for you?
That decision is yours and only yours to make.
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Hi Frank,
I was wondering if you could help clarify this for me. I was reading the 8-K form and it showed that they are issuing 10,000,000 AMC Preferred stocks and each will be divided into 100 AMC Preferred Equity Units (APES) which gives the total they have authorized of 1 billion APES. So is this not really a 50/50 split? I have seen so many different explanations but nothing consistent across the board. Just trying to make sense of everything
Thank you very much for answering me, and can you tell me if you maintain the decision to buy and keep the shares of AMC to continue fighting for the mother of MOASS? according to the data that you are provided by the market?
I just published this article today where I go over this, I’m glad you bring it up: https://franknez.com/amc-entertainment-shows-strong-bullish-sentiment/
I hope this brings you some clarity!
I don’t know English, I’m using the Google translator, first of all I would like to thank Frank for keeping us up to date on everything, I have been buying and holding my shares for 1 year and 2 months, I have several doubts, my questions Frank, if you can answer me to gain knowledge , because I am really confused, is the creation of APE shares beneficial for retail investors? AMC shares will remain at their closing prices the day before the alleged delivery of the APE shares? I have a certain amount of AMC shares, am I going to receive the same amount of APE that I have at that moment, regardless of whether they are synthetic or not? Your criterion of continuing to endure is maintained? Please I have these doubts, if you could clarify it would be very beneficial.
Hi Alfredo, thanks for your comment. I don’t personally think APE stock is beneficial for retail investors, mainly for the reasons stated in this article. It’s primarily beneficial to the company. I also cannot encourage anyone to buy or sell AMC or APE stock, I can only provide information from which investors can then make a decision for themselves. Your broker should be able to deliver all APE stock if you decide to continue holding AMC stock. AMC’s share price will be split in half with APE once APE goes into effect. Market conditions based on supply and demand will then continue to decide the price of both securities.
I’m not sure you have the APE valuation completely correct. APE only becomes worth the same as AMC if dilution is voted in. On day one the chance of that is basically zero, so really APE might be worth $.01 and ex divy AMC = pre divy AMC – APE.
The value of APE will be determined in the market but it will approach 1/2 AMC as the likelihood of conversion increases. What raises likelihood of conversion? It’s change of conviction by the apes or it’s dilution of APE by AA…new holders of APE will get a vote in conversion.
In the short run I have no idea what happens, but in the long run once APE goes above $10 I’m pretty sure AA will sell enough to pay down the debt.
So what would happen if I had call options on amc and the expire date was just after the dividend?
“It’s very unlikely since naked shares tend to be transacted outside the lit exchange and are not traceable/recorded for the public.”
It sounds like a textbook definition of fraud. is the premise that the naked shorted shares are always traded within 2 related accounts in the dark exchange to force prices down? It seems very difficult if not impossible to tank a stock without mingling fake shares in with real share trades. AMC should be able to document real shares traded/owned vs shares outstanding at a point in time – if they really want to.
I agree.
I’m long and ready to see how this goes. It took a lot of learning to get me ready to pounce! Lets go!
My thoughts are simply , How does APE help us? If the shorts were worried they would have dumped already. Why does Trey Trades think we will be in or around $20.48 Monday. I am starting to think AA
is not our friend, Correct me if I am wrong . In June we started to run, we got to about $30.00 what happened. AA dumped a lot LOT of shares onto the marked then we dropped . Now again we were starting to run and Again AA drops APE on the Market . Friday we dropped again. What am I missing ?
How is this good for Retail? Great for AMC not for us.
Si AMC va bien. Nosotros también. Sino es así para ti será que estás fuera de…..
It’s not necessarily going to put money in retail’s pockets, unfortunately. It’s more so a strategy that benefits the company fundamentally and allows them to raise cash with ‘APE’ instead of ‘AMC’.
So if institutions are holding “synthetic fake” shares of AMC, and do not get the APE shares, will their fake shares be cut in half while also not getting the ape shares? Sound like they might lose half their funds if that’s the case
It would open a whole can of worms. Brokers would need to investigate at that point.
Yes. If there are institutions holding synthetic shares, they will simply not receive APE. but if individual investors holding synthetic shares don’t recieve APE it then become an issue. Brokers have to go out and find them. Becomes a supply and demand issue. Only 516m will exist. They can’t re-hypothecate if no one sells. Correct?
Let’s start a discussion! Leave your thoughts below.
All of the synthetic shares created by the market makers and brokers and sold to retail will have to be accounted for when the ape shares come out. The market makers/ hedge funds/ brokers and big banks who have diluted the amc stock are going to have to find ape shares for all amc shares purchased by retail