Citi opens ‘negative catalyst watch’ on AMC into conversion ruling

Citi on Friday opened a “30-Day negative catalyst watch” on shares of AMC Entertainment while keeping a Sell rating on the name with a $1.65 price target. The firm expects a Delaware court to rule in favor of the company, clearing a path for it to convert its APE units into common units and issue incremental common units. As a result, the value of AMC common units and APE units will converge, the analyst told investors in a research note. Noting that AMC’s common units trade at a premium to the APE units, Citi expects downward pressure on the shares in the coming days.