amc entertainment holdings inc’s push to convert its amc preferred equity units or apes into common stock is a massive opportunity in the company’s battle to eliminate debt according to b riley securities analyst eric wold in an sec filing friday the movietheater chain and memestock darling announced a special meeting of shareholders to increase the number of amc amc authorized shares from just over 524 million to 550 million and authorize a 1for10 reverse split of the company’s common stock converting apes ape into shares of common stock amc’s stock fell 56 monday while the apes rose 214 the sp 500 spx declined 03 also read it’s national popcorn day and amc’s ceo is all over it “given that ape unit holders essentially control the vote at 64 of combined holdings and may not get another chance to extract value from those units we expect the two proposals to pass and for this vote to open the door to a massive equity raising opportunity for the company in the coming years” wold wrote in a note released monday “not only could this help the company eliminate all balance sheet debt as the exhibition industry continues to recover but it could allow management to pursue additional diversification options to drive incremental growth within the greater media industry” amc said on dec 22 2022 that it was seeking a 1for10 reverse split of its common stock the special meeting of shareholders is scheduled for march 14 2023 according to friday’s sec filing “assuming the current amc stock price holds into the vote the reverse stock split would open the door to roughly 22 billion in equity capital” wold wrote on monday related ‘i am amc’s largest retail shareholder’ says ceo adam aron reiterating pledge to not sell more stock amc exited its fiscal third quarter with debt of 53253 billion and with cash and cash equivalents of 6846 million “with our projection that amc is unlikely to turn freecashflow positive until 2024 with multiple tranches of debt set to mature in the coming years within a higher interest rate environment we believe debt reduction is top of mind with management we suspect the opportunity to raise billions of dollars in equity provides that path” wold wrote “if either proposal fails there is no conversion of ape units into amc common shares and we would suspect ape units could potentially decline to price levels at the time before the announcement on december 22 or below 100” the analyst added now read ‘avatar’ ticket sales better than expected says amc ceo adam aron over the past two years amc has been on a rollercoaster ride that took it from beleaguered pandemic victim to memestock phenomenon amc used the steep rise in its share price to tap into equity and debt markets raising 917 million in january 2021 the company’s apes made their trading debut in august with its ape equity unit amc created something like a 2for1 stock split marking the company’s latest effort in a fight over stock issuances the name is a nod to the investors who turned the company into a meme stock who often refer to themselves as “apes” or “ape nation” amc’s stock has fallen 478 in the last 12 months compared with the sp 500’s decline of 104 the apes have fallen 625 since their debut if the ape conversion is accepted it could help drive amc’s expansion according to wold “in recent years management has initiated some minor extensions into areas that could be viewed as complementary to the exhibition business maybe other than hycroft mining” he wrote “however we could see this access to meaningful capital as providing a path to further moves both within the exhibition space or into other media segments that could provide proper diversification and growth” last year amc stunned investors with an investment in gold and silvermining company hycroft mining holding corp hymc and its 71000acre hycroft mine in nevada the movietheater chain is also branching out into an amcbranded credit card and is selling its amc perfectly popcorn in us grocery stores