AMC Entertainment Holdings posted a bigger-than-expected loss as costs surged nearly 60% in the second quarter.
The company also said it will pay a special dividend in the form of preferred shares.
Shares of the once popular meme stock are 7% lower in premarket trading as the move raised concerns of a possible equity dilution.
AMC’s preferred shares could be converted to common stock if investors approve of the move.
AMC CEO: MOVIEGOERS SPENDING DESPITE INFLATION
The company will give one preferred share for every AMC common stock held.
AMC is planning to list about 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 paying down debt or raising fresh equity,” Chief Executive Adam Aron said.
AMC REVENUE QUINTUPLES AS MOVIEGOERS RETURN TO THEATERS
Quarterly revenue rose to $1.17 billion, edging past estimate of $1.16 billion, while net loss of 24 cents per share was bigger than market expectation of 21 cents, according to Refinitiv data.
|AMC||AMC ENTERTAINMENT HOLDINGS INC||18.67||+0.46||+2.52%|
AMC’s market value had skyrocketed last year in a retail investor driven rally, helping it raise billions of dollars in equity capital even at the cost of investor concern of an erosion in the value of its stock.
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During the peak of the coronavirus pandemic, AMC faced heavy losses as restrictions forced theaters to shut again.
Reuters contributed to this report.