AMC Entertainment (NYSE: AMC) announced on Thursday, that it will be issuing dividends to its shareholders in the form of AMC preferred equity units that will begin trading on the New York Stock Exchange under the symbol APE on August 22.
"Today we are rewarding and recognizing our passionate and supportive shareholders, both to our shareholders in the U.S. and internationally," said AMC CEO Adam Aron in a statement. "Shareholders will receive one AMC Preferred Equity unit for each company issued share of AMC common stock that they own."
AMC says that investors can expect to receive their APE units at the close of business on Aug 19. The day after the announcement, AMC shares rose by 31% to $22.18 and opened higher again on Monday at $24.06.
"While no one's crystal ball can accurately predict stock market swings or volatility," Aron said on a call with investors, "the economic interest that our shareholders will have in both shares and APEs will be in a company that we believe to be considerably stronger than AMC is now prior to this announcement being made this afternoon."
Each of the 517 million APE shares being distributed will carry the same voting rights as common AMC shares. After the APEs are put on offer, AMC will have 4.5 billion units remaining which it could still sell. The APE shares could be converted to common shares, but only if a plan is authorized by investors.
After nearly going bankrupt in 2021 due to pandemic lockdowns, AMC's popularity skyrocketed amongst everyday investors, so-called "apes", helping the company raise billions of dollars.
However, as a result of that surge of interest, AMC ran out of stock to sell, and efforts to issue 25 million additional shares were rejected by investors. The preferred equity units are a way for the company to get around the risk of diluting its existing stock.
"This new AMC Preferred Equity gives AMC a currency that can be used in the future to strengthen our balance sheet, including by paying down debt or raising fresh equity," Aron said. "As a result, this dramatically lessens any near-term survival risk for AMC... [and] can provide AMC with added capital enabling us to seek investment opportunities that could create significant shareholder value and could be transformative in nature."
The statement also details AMC's plans to introduce a special "I OWN APE" NFT to accompany the new shares. Each investor will be eligible to receive a free NFT, according to the release. Early this year, the company released a similar "I OWN AMC" NFT to investors, some of which have since been sold for hundreds to thousands of dollars. Investors can also sign up to receive an updated version of that original NFT.
AMC's recently released second-quarter report showed that ticket purchases are up, helping the company bring in $1.2 billion in revenue. Still, the theater chain posted a net loss of $121.6 million.