When AMC (NYSE:AMC) enjoyed its boom as a meme stock, driven by social media like Wallstreetbets, its release of the AMC Preferred Equity unit (NYSE:APE) was controversial, to say the least. Now, AMC’s move to bring the APE under its main umbrella may put the controversy to rest. But not for right now, as another court-connected delay just kicked in. Investors are pretty happy, and AMC shot up over 20% at one point in Monday afternoon’s trading.
The latest move features a Delaware court declaring that it would set up preliminary injunction hearings on April 27. This does, however, mean that the originally-planned votes to actually convert or not convert the shares can still go on. That move was set for March 14. The injunction hearing, meanwhile, stems from a recently-filed class-action lawsuit from the Allegheny County Employees’ Retirement System. The System alleged that AMC, along with its board, were not only shirking fiduciary duties but also violating Delaware General Corporation Law.
The move takes on something of a new importance of late. With signs emerging that AMC may pull an earnings surprise out of its hat when its next earnings report emerges, some are taking AMC stock a lot more seriously than they did only recently. New theatrical releases are giving investors reason to hope, and the theater’s overall evolution is still moving along. Both points suggest that the theater may not be fading away but rather simply changing.
Investors are less sure. Though share prices are spiking today, analyst consensus still calls AMC a Moderate Sell. Further, with an average share price of $3.25, AMC stock still comes with a 56.95% downside risk.
