Are you tempted to buy AMC’s new APEs? Be prepared to lose everything, the company warns

 

Shares of AMC preferred equity units, or ‘APEs,’ rose 5% Monday, while the company’s common stock fell 7.5%, after the company unveiled plans to sell another up to 425 million APEs.

At current prices, the cinema chain could raise up to $1.6 billion from the sale of additional APEs, which was disclosed in a regulatory filing with Citigroup Global Markets acting as sales agent.

“The company intends to use the net proceeds, if any, from the sale of AMC Preferred Equity Units APE, -5.87% primarily to repay, refinance, redeem or repurchase the company’s existing indebtedness (including expenses, accrued interest and premium, if any) and otherwise for general corporate purposes,” said the filing.

AMC AMC, -14.52% issued the first APEs in August as a special dividend using the name created by the investors who turned the company into a meme stock, who often refer to themselves as “apes” or “ape nation.”

See Now: How one investor applied the lessons of the meme stocks frenzy to blockchain and NFTs

The APE special dividend in effect created a 2-for-1 stock split, with half listed under AMC and half under APE. The company issued an APE for each of its roughly 517 million shares outstanding.