AMC stock CEO Adam Aron took to twitter early Thursday to answer some important questions that have been at the forefront of his retail army of investors’ minds lately.
In a tweet Aron said: “For our new APE units, I want you to know “what, why, how and when.” So, we just put on our web site answers to 26 Frequently Asked Questions. This APE dividend goes ONLY to those owning company issued common shares. APE make AMC infinitely stronger.“
He then also linked to the investor AMC website which brings you to pages and pages of questions and answers involving the ‘APE Units’
Some of these Questions included are things like:
“What is an AMC Preferred Equity unit?”
“When is the AMC Preferred Equity unit dividend being issued?“
“Are the AMC Preferred Equity units convertible into common stock? If so, when?“
AMC Shareholders have been very concerned about these APE units and dilution for their investments.
WHAT IS STOCK DILUTION?
Stock dilution defined on Wikipedia is also known as equity dilution, is the decrease in existing shareholders’ ownership percentage of a company as a result of the company issuing new equity. New equity increases the total shares outstanding which has a dilutive effect on the ownership percentage of existing shareholders.
Adam Aron speaks out about APE Dilution
HOW MUCH WILL $APE TRADE FOR?
If you hold shares of AMC Stock, you are going to be getting $APE shares very soon!
There has been a lot of FUD around how much each share of $APE is going to be trading for, and how much APE will be worth. This is a fair question since the shareholders are eagerly awaiting to have these share join their portfolios.
CEO Adam Aron said in a tweet: “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.”
To put things simply, it sounds like if AMC Stock is trading at $20 per share, $APE could open at $10 each (Which would also lower the share price of AMC Stock 50%)
Adam Aron explained in a tweet and said: “Blindly fear dilution? You miss crucial FACTS. In Jan ‘21 AMC issued shares, AMC share price soared. May/June ‘21 more AMC shares, again our stock soared. Stopped selling shares July ‘21, $AMC started a long fall. APEs announced last week, $AMC up again. APEs makes AMC stronger.”
He explains that in the past when AMC issued more shares (or diluted the stock) it actually sent AMC Stock skyrocketing, sort of painting a picture that investors should not “blindly fear dilution” and instead understand all the facts.
Adam Aron also said in another tweet: “Hyped up by some who may wish AMC harm, anxious messages come in fearing dilution or that I may “screw” AMC shareholders. I own 793,974 AMC shares, and should vest in 1 – 2 million more AMC shares (after taxes) by 2024. That’s a huge incentive to do what’s best for AMC & for you.”
He explains that he is very deeply invested in AMC Stock himself and wants the best for the company. Some Apes still fear that this AMC Dividend $APE move could be the wrong move for the company and in turn hurt the stock… But only time will tell.