AMC reverse stock split and APE conversion have eliminated the "overhang" concern.

August 24, 2023: AMC Entertainment Holdings Inc (NYSE: AMC) completed a 1-for-10 reverse stock split on Thursday, reducing its everyday share count to 52 million. The company also converted its 995 million APE shares into roughly 100 million AMC shares.

AMC shareholders approved the reverse stock split and APE conversion in June. The company said the moves would remove an “overhang” on its stock price and make it more attractive to institutional investors.

Analyst Alicia Reese of Wedbush Securities upgraded AMC to “neutral” from “underperform” after completing the reverse stock split and APE conversion. She said the moves “remove a significant overhang” and expects AMC shares to settle around her new $19 price target post-conversion and post-reverse-stock-split.

Reese said she is still concerned about AMC’s liquidity challenges, but she believes the company is well-positioned against an improving industry backdrop. She expects the North American box office to end up 20% higher than 2022.

Actionable Takeaways

• AMC completed a 1-for-10 reverse stock split on Thursday, reducing its everyday share count to 52 million.
• The company also converted its 995 million APE shares into roughly 100 million AMC shares.
• The moves were approved by AMC shareholders in June and are expected to make the company’s stock more attractive to institutional investors.
• Analyst Alicia Reese of Wedbush Securities upgraded AMC to “neutral” from “underperform” after completing the reverse stock split and APE conversion.
• She said that she expects AMC shares to settle around her new $19 price target post-conversion and post-reverse-stock-split.
• As an AMC shareholder, you should know the impact of the reverse stock split and APE conversion on your shares. Your shares will be worth ten times less after the reverse stock split, but you will have ten times more. The APE conversion will not affect the value of your shares.

If you are considering investing in AMC, consider the risks involved. The company is still facing liquidity challenges and volatile stock prices. You should consult with a financial advisor before making any investment decisions.