Investors in AMC Entertainment (NYSE:AMC) stock are keeping an eye on the company after a Delaware court delayed its stock conversion.
The movie theater company currently has both common shares, trading under AMC, as well as preferred shares, AMC Preferred Shares (NYSE:APE). It wants to convert those preferred shares into shares of its common stock.
However, a group of investors is getting in the way of that. They filed a lawsuit back in April arguing against the creation of APE stock. These investors claim AMC is breaking the law by creating APE stock without investor approval. They say this allows them to reduce shareholders’ voting power in the company.
While AMC has been seeking to lift a hold on its stock conversion plan, it’s having trouble. A Delaware court blocked its request to lift the hold yesterday. AMC says it will consider what to do next now that the court has supported the stock conversion hold, reports Reuters.
What This Means for AMC Stock
AMC stock is stuck in limbo for the moment as it can’t move forward with its stock conversion plan. The company was intending to consolidate shares of AMC in order to effect the conversion. It’s unknown when, and if, that reverse stock split will take place now.
AMC stock is up 16.4% and APE stock is down 10.4% as of Thursday morning.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
