AMC tumbles as shareholders approve plan to convert APE preferreds

(Reuters) – Shares of AMC Entertainment Holdings Inc tumbled about 17% on Tuesday after shareholders voted in favor of converting the companys preferred stock into common shares.

Shareholders also approved a reverse share split at a 10:1 ratio.

The approval of the measures at Tuesdays shareholder meeting comes as AMC faces an April 27 hearing in a lawsuit claiming it circumvented shareholders who were against adding more shares.

The preferred shares, which trade under the symbol “APE,” have lost over 70% since they were issued in August as part of a plan to pay down the companys debt.

The common stock was down 17.3% at $4.51 following the vote, putting it on track for its worst day in almost two years. The preferred shares were up 6.9% at $1.85.

AMC investors suing the company have accused the movie theater chain and several of its directors of violating a law by creating the preferred shares in an attempt to “eviscerate” the voting power of common stockholders who had not supported issuing new shares.

AMC became a “meme stock” during the COVID-19 pandemic, raising more than $2 billion in 2021 as retail investors piled in to its stock and others such as GameStop Corp which short sellers had bet against.

(Reporting by Noel Randewich; Editing by Mark Porter)