AMC’s new ‘APE’ units are a meme-friendly way for the theater chain to raise cash fast
AMC Entertainment has embarked on a meme-friendly experiment to give a token reward to its retail investor base while also creating a backdoor way to raise more cash down the line.
The theater chain’s new preferred share class — called “APE” units — begin trading on Monday after being distributed to shareholders as a dividend last week. “APE” stands for AMC preferred equity.
The special dividend seems to be in keeping with CEO Adam Aron’s aggressive marketing efforts to appeal to the retail investors who call themselves “Apes” and have rallied around AMC over the past year and a half.
In some ways, the new shares are similar to the benefits of free popcorn and exclusive screenings that Aron has rolled out in recent months.
However, the APE units are a corporate finance tool at their core because the shares create a new way for AMC to raise money.
When its stock price soared in 2021, the beleaguered theater chain sold millions of common shares to keep itself afloat during the pandemic, but eventually it ran out of its allotment. Shareholders declined to approve additional sales.
The initial APE units were distributed free of charge, but the company’s filings say it has the right to sell more of the units in the future — without additional shareholder approval.