Many AMC shareholders are excited about the company’s introduction to APE stock.
However, others are wondering if the dividend is even worth it.
Should you buy AMC before or after the dividend goes through?
This article is going to help you decide the best route for you.
Let’s get started!
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APE is only a few days away
Investors who hold or buy AMC stock prior to Friday the 19th will be granted with the same exact number of APE shares on Monday the 22nd for every AMC share they hold.
AMC and APE will make up the value evenly of AMC’s closing price at the end of the bell on Friday.
This means if AMC closes at $25 per share on Friday, both AMC and APE will be worth $12.50 on Monday.
Market conditions based on supply and demand will then decide the future price of both AMC and APE stock.
If you hold $1,000 in AMC, the value of your portfolio will still be worth $1,000 – the only difference is it will be split between two securities (AMC and APE).
The theory behind APE is that it’s supposed to uncover the vast amount of synthetic AMC shares out in the market.
And if it proves to be successful, this will be MASSIVE.
Brokers will have no other option than to open investigations and be obligated to provide investors with APE.
In the process, institutions holding synthetics will be forced to buy back every share they’ve flooded the market with, triggering MOASS (mother of all short squeezes).
This would mean pay day for AMC shareholders, and the greatest destruction of short sellers to ever happen in history.
The theory says that AMC and APE will follow each other relatively closely, so if one skyrockets so will the other.
In this scenario, shareholders are receiving value on top of value.
Who does this benefit?
If you decide to buy AMC stock due to the APE theory, then it’s worth the risk because the rewards could prove to be extremely high based on the theory.
Fundamentally however, it benefits AMC Entertainment as a company because they will be granted access to half of shareholders capital through APE.
This means the company may cash out at any moment should they decide to raise capital to pay off some debt; APE’s price would then tumble during a hypothetical selloff.
Buying AMC prior to the dividend means you will be granted with APE stock, but half of your capital will be at the company’s disposal should they require access to it.
Buying AMC after the dividend will mean AMC Entertainment stock will be at a bargain price – you can’t get a better deal than that.
Investors can’t go wrong with either, but it’s important to understand your finances and where your money is going.
But I’m curious to learn what you think.
Be sure to leave your thoughts in the comment section down below.
Related: How Much Will APE Stock Be Worth?