Adam Aron CEO of AMC ENT. took to twitter Saturday afternoon to clear up some misinformation when it comes to the news around the New $APE Dividend Shares that will be in AMC Shareholder’s broker accounts soon enough.

Aron Explained that “More FUD work. Ultimately, market trading determines the ongoing prices of AMC shares and APE units. They are very similar in nature, so logic says that initially the AMC share should approximately trade for 50% and the APE unit 50% of where shares trade just before the dividend.”

There has been a lot of confusion around this new ‘Dividend’ that Aron announced on Q2 Earnings day, and for good reason. Most stock market investors are only aware of what a ‘normal’ dividend tends to be.

A Dividend is defined on Investopedia by: A dividend is the distribution of a company’s earnings to its shareholders and is determined by the company’s board of directors. Dividends are often distributed quarterly and may be paid out as cash or in the form of reinvestment in additional stock.

Investing can already be confusing, especially for newer investors. This APE unit will be given to all APES.

Adam Aron announced they will issue 516.82 million $APE shares one for every share of common stock outstanding. So if you have 100 shares of AMC you will get 100 Shares of $APE.

The other issue of concern for AMC Stock and soon to be APE holders is how they are going to be taxed. Adam Aron took to twitter to explain: As for U.S. income taxes, this all should be tax free to you. There is no tax owed on the APE when you get it. If/when you sell it, our understanding is that for short term/long term purposes, the acquisition date of your APE is the same date as with the corresponding AMC share.

The dividend “should be opportunistically used to [reduce] total outstanding debt or otherwise,” wrote Benchmark analyst Mike Hickey, in a note released on Friday.

AMC ENT. currently has approximately $5.5 billion in outstanding debt which has been a main concern for AMC , the investors and even the naysayers. “We suspect management is targeting leverage at 3x – 4x AEBITDA [adjusted earnings before interest, taxes, depreciation and amortization]. FY24 consensus is for $660M in AEBITDA, which would translate to a total debt target of $2.3B, which would imply a total debt reduction target of $3.2B,” he added.

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