AMC still making headlines
Running Point and its chief investment officer, Michael Ashley Schulman, CFA, were quoted by Reuters in an article — by Akriti Sharma, Medha Singh, Eva Mathews, and Yuvraj Malik, “U.S. court denies AMC’s request for speedier stock conversion” — regarding a U.S. court denyinging AMC Theatres’s request to convert its preferred stock into common shares.
The article was also picked up by MSN, Street Insider, U.S. News & World Report, and Estrategias de Inversion (Spain).
A lawsuit may lead to further equity dilution
Even though AMC is a Reddit stonk (stock) subject to occasional hype and short squeezes, even its valuation sometimes submits to the fundamental concerns of earnings, equity dilution, and disappointment. If company management gets its way, the valuation of AMC stock and APE preferred may converge over time until APE converts to common. But if this happens too quickly, another shareholder lawsuit may emerge. Ironically, even a lawsuit may lead to further equity dilution, as the last one was settled with the issuance of more shares😏
Quoted article excerpt is below:
“In this case, it is possible that if company management gets its way, the valuation of AMC stock and APE preferred will converge over time until APE converts to common,” said Michael Ashely Schulman, partner and chief investment officer at Running Point Capital Advisors. “But if this happens too soon, another shareholder lawsuit will probably emerge.”
In Spanish: “En este caso, es posible que si la dirección de la empresa se sale con la suya, la valoración de las acciones de AMC y APE preferentes convergerá con el tiempo hasta que APE se convierta en común”, dijo Michael Ashely Schulman, socio y director de inversiones de Running Point Capital Advisors. “Pero si esto sucede demasiado pronto, probablemente surja otra demanda de accionistas”.
Disclosure: The opinions expressed are those of Running Point Capital Advisors, LLC (Running Point) and are subject to change without notice. The opinions referenced are as of the date of publication, may be modified due to changes in the market or economic conditions, and may not necessarily come to pass. Past performance is not indicative of future results. Forward-looking statements cannot be guaranteed. Running Point is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Running Point’s investment advisory services and fees can be found in its Form ADV Part 2, which is available upon request. RP-23-36