AMC Preferred Equity Dividend (APE)
AMC Entertainment (NYSE: AMC) announced on Aug. 4 that it will issue a Preferred Equity Dividend to eligible shareholders. Eligible shareholders will receive the dividend via one additional AMC Preferred Equity unit (ticker $APE) for every share they own.
All $AMC positions purchased before market close on Aug. 19 will be eligible to receive the $APE dividend. $APE dividends will be issued at close of trading on Friday, Aug. 19. Please note that while dividends will be issued on Aug. 19, they may not display in your Public.com account until on or after Monday, Aug. 22.
What is AMC’s Preferred Equity Unit ($APE)?
$APE is a new class of preferred equity units issued by AMC Entertainment that will be listed on the NYSE and commence trading on Aug. 22.
Via AMC’s filing: “Each AMC Preferred Equity Unit represents an interest in one one-hundredth (1/100th) of a share of the Company’s Series A Convertible Participating Preferred Stock. Each share of Preferred Stock is initially convertible into one-hundred (100) shares of the Company’s Common Stock.”
$APE holders will have the same voting rights as $AMC holders.
Why is AMC issuing Preferred Equity Units?
According to AMC CEO Adam Aron, the new 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.” The issuance of AMC Preferred Equity Units was authorized by shareholders via a formal approval in 2013, per AMC Investor Relations.
Is this a stock split?
While the issuance of Preferred Equity Dividends is not exactly the same as a stock split, AMC’s official statement noted that “on the ex-dividend date [Aug. 22], the price of AMC Common Stock is likely to decline to reflect the fact that shares purchased on or after such date would no longer be entitled to the dividend. This is similar to what occurs in a stock split.”
Is this a Spinoff?
Because AMC issued a new security that is different from its common stock, the NYSE has categorized this event as a spinoff; however, AMC has declared that the distribution of the AMC Preferred Equity Units is a dividend.
What is the tax treatment of the dividend?
According to AMC’s FAQ Page, the receipt of the APE shares is not expected to be a taxable dividend. The holding period used to determine short term or long-term capital gains/ losses is expected to be the same date as the holding period of AMC.
An IRS Form 8937 will be published on AMC’s website, which is expected to be finalized by August 31st.
This information does not constitute as tax advice. If you have any questions on how this pertains to your specific tax situation, we encourage you to speak with a tax professional.
When will I see the $APE dividend in my account, and how will it appear in my statements?
All $AMC positions purchased before market close on Aug. 19 will be eligible to receive the $APE dividend. Please note that while the dividend will be distributed on Aug. 19, you may not see it displayed in your Public.com account until on or after Monday, Aug. 22.
What is the last day I can purchase $AMC and still be eligible to receive the $APE dividend?
If you purchase AMC on Public before market close on August 19th, you will receive the $APE dividend.
Can I convert $APE to common shares?
According to AMC CEO Adam Aron, “While each APE is designed to have the same rights as a common share, and can convert into a share of common stock, that conversion decision is solely up to you. Conversion can only take place if the company proposes and shareholders (including APE holders) vote to approve the authorization of additional common shares at a future AMC Entertainment stockholders’ meeting.”
When will $APE become tradable?
$APE will be listed on the New York Stock Exchange (NYSE) and tradable starting Monday, Aug. 22. $APE will be available to both buy and sell on Public.
Is $APE affiliated with the crypto asset ApeCoin?
No. $APE is a new class of stock issued by AMC Entertainment (APE) and is NOT related to the crypto asset ApeCoin.
What is the AMC Investor Connect NFT?
During AMC’s Q2 2022 earnings call on Aug. 4, CEO Adam Aron said that AMC Investor Connect members will be entitled to an updated “I Own AMC” NFT (non-fungible token). AMC first issued an NFT to Investor Connect members in Jan. 2022.
AMC Investor Connect is a program independently managed by AMC Entertainment and allows self-identified shareholders to sign-up for exclusive benefits. AMC Investor Connect is not affiliated with Public.com. For information on how to sign up for Investor Connect or claim your NFT, please visit the AMC Investor Connect website.
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