AMC shareholders have been urging CEO Adam Aron to address APE, AMC’s Preferred Equity as shares fall below $1.
APE has taken a nosedive from $7 to the current share price of $0.68.
Retail investors have demanded the CEO to speak out on what’s happening with the share price after bold announcements of a ‘pounce’ earlier this summer.
The CEO has now spoken out on the falling APE share price in a new press release shown below.
Let’s dive right into it.
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Adam Aron on APE Share Price
In a new press release by AMC Entertainment, the CEO released the following statement:
“Even though the APE units and our common shares are economically equivalent, it is disappointing that the APE units have since inception consistently traded at a significant discount to the AMC common shares.
While the trading prices of the two securities seem to reflect distinct market and trading dynamics, the APEs are serving precisely the purpose originally intended for them.
At a time when one or more of our competitors have been facing potentially devastating liquidity challenges, by contrast during the past 90 days, AMC has been able to raise $162 million of additional cash through the sale of equity thereby improving our own liquidity position markedly.
In addition, AMC reduced debt for the third time this year, including most recently by buying back debt at a substantial 61% discount and is able to contemplate various opportunities to add theatres to our fleet including just having successfully secured for AMC the attractive former Arclight Boston.”
Adam Aron added, “Our outlook for the industry is positive as we expect the box office will be larger in 2023 than in 2022.
Our liquidity position is strong, as we continue to demonstrate our ability to raise cash, thereby strengthening our balance sheet.
We also continue to enhance our footprint by acquiring superb theatres without significant capital outlays while at the same time exiting under-performing locations.
For so many reasons, we believe the future remains bright for AMC.”
APE Continues to Serve Its Original Purpose
Despite Adam Aron’s disappointment in the share price of APE, he says the equity continues to serve its original purpose to provide liquidity to the company.
APE is down -88.67% since its inception with majority of the float being held by retail investors.
Only 0.18% of institutional investors are currently holding the equity according to a Nasdaq report.
There was tension between shareholders whether to sell or hold the security once it became available in the market due to primarily being a liquidity tool for the company rather than an investment for retail investors.
In October, AMC Entertainment released a statement warning both retail investors and short sellers of the possibility of accrued losses through either the possibility of a short squeeze, or company capitalization.
Earlier in December, Yahoo Finance listed APE as the #1 top shorted stock on their list.
Are You Holding APE Shares?
What is your current sentiment on APE?
Will APE shares recover or is too much trading happening in dark exchanges that suppress retail volume from having an impact on share prices?
Leave your thoughts in the comment section down below.
Related: Chairman Gensler Says He Understands Retail’s Frustrations
