AMC: AMC Stock Plummets 25% After Judge Approves Contentious Share Dilution

“Apes together strong” goes a Reddit adage. But the stock is on deck to fall off the stairs like a Family Guy character.

• AMC stock AMC is in for a painful opening to start the week after the cinema chain got what it wished for. A judge has approved AMC’s conversion of AMC Preferred Equity, or APE, into common AMC shares. That’s a direct consequence of a vote this spring when shareholders approved the move.
• Now, the Reddit darling’s shares are staring at a 25% loss out of the gate as traders and meme-stock lovers, including the indomitable Reddit army, are not all good with the ruling. The initial settlement was rejected late July, which powered the stock higher by 33% on the day.
• What does it all mean? The revised settlement will mean that individual investors will get extra shares, even though many of them have opposed the decision. When all this is done, AMC expects the effort to lure in more funding and avoid another one of those “teetering-on-the-verge-of-bankruptcy” situations like the one during the pandemic era.