AMC settlement clears deck for ‘massive’ equity raise, says B. Riley

B. Riley says AMC Entertainment’s lawsuit settlement that sought to block a planned conversion of APE units into common shares "clears the deck for potentially massive equity raise." After the conversion, a reverse stock split and payment of shares for the lawsuit could result in the company issuing 394M shares to raise cash, the analyst tells investors in a research note. The settlement provides a path for AMC to meaningfully reduce or eliminate its debt, which is key with the company not expected to turn free cash flow positive until 2024, says the firm. It keeps a Neutral rating on stock.