AMC Entertainment Sinks on Plan to Convert Preferred Shares
- Theater chain shares fall as much as 22% before paring decline
- CEO says changes would keep AMC from becoming ‘penny stock’
An AMC movie theater in the Times Square neighborhood of New York.
Photographer: Amir Hamja/BloombergThis article is for subscribers only.
AMC Entertainment Inc. sank after proposing to convert preferred equity units into common shares along with a 10-to-1 reverse stock split.
The changes would stop investors from pushing AMC toward “penny stock” territory, Adam Aron, chief executive officer of the world’s largest movie theater chain, said Thursday. The preferred equity units debuted in August and were quickly caught up in volatility linked to retail trading of so-called meme stocks.