AMC Entertainment Holdings posted a larger-than-expected loss as expenses increased nearly 60% in the second quarter.
The company also said it will pay a special dividend in the form of preferred stock.
Shares of the once-popular meme stock are down 7% in premarket trading as the move raised concerns about potential equity dilution.
AMC’s preferred stock can be converted to common stock if investors approve the move.
AMC CEO: MOVIE EXPENSES DESPITE INFLATION
The company will issue one preferred share for each AMC share held.
AMC plans to list approximately 517 million preferred shares on the New York Stock Exchange under the symbol “APE”.
“This new AMC Preferred Equity gives AMC a currency that can be used in the future to strengthen our balance sheet, including by servicing debt or raising new equity,” said Chief Executive Adam Aron.
AMC REVENUE GETS TWO FOLD AS MOVIE GATE RETURN TO THEATERS
Quarterly sales rose to $1.17 billion, surpassing the $1.16 billion estimate, while a net loss of 24 cents per share exceeded market expectations of 21 cents, according to data from Refinitiv.
|AMC||AMC ENTERTAINMENT HOLDINGS INC||18.67||+0.46||+2.52%|
AMC’s market value had skyrocketed last year during a rally driven by retail investors, allowing it to raise billions of dollars in equity, even at the cost of investor concerns about an erosion in the value of its stock.
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During the peak of the coronavirus pandemic, AMC suffered heavy losses as theaters were forced to close again due to restrictions.
Reuters contributed to this report.