amc logo cinema

AMC APE Preferred Stock: Everything You Need to Know

By:Nick Battista

AMC Entertainment announced earnings on August 4th with a loss of (0.20) EPS in the second quarter of 2022, a surprise “beat” on the streets (0.22) expectation. What followed on the earnings call was arguably more surprising - CEO Adam Aron announced the distribution of a preferred stock dividend, APE, for all AMC stockholders.

What is AMC’s meme stock history?

AMC’s recent history is tied closely to the “meme” stock craze that started with GME in early 2021, along with many other stocks which the market had largely written off like BBBY, BB, FIZZ and others. Retail traders have continued to pile into the “HODL” mentality with day-to-day stock trading volume remaining high – many multiples of pre-2021. Stock price volatility has been digested by the retail following as a short-term hiccup to the long-term fight against the hedge funds. Option volume has followed a similar path, with option volatility expanding on the upside as traders position for the next mother-of-all-short-squeezes.

What is the APE preferred stock?

At first glance, this preferred stock distribution looks a lot like a stock split based. This is based on the OCC Settlement Notice, which indicated a 95%/5% split of AMC/APE shares for the settlement of the current open options. In this case, AMC will be issuing 1 share of APE preferred equity for every 1 share of AMC. Traditionally, a stock will split shares to add liquidity, reduce volatility, and to reduce the notional value of one share of stock by issuing more shares of stock. A current holder will still hold the same amount of notional value in the stock as they had pre-split, with more shares of the stock at a lower spot price. You can view the full 8-K filing HERE.

Tune into Options Trading Concepts Live to learn more about AMC & APE Stock Categorization.

How are investors and traders affected?

In this case, the preferred stock shares will trade independently of AMC stock at the time of the distribution, with the potential to be converted to AMC shares at a point in the future based on a shareholder vote. This is unique in that most preferred stock don’t have voting rights. With voting rights, holders can choose to vote to convert shares of APE into stock shares (AMC) at a later date.

Who qualifies for AMC’s “APE” special dividend?

All holders of AMC stock as of the August 19th record date received one share of APE, with the first trade of AMC and APE on Monday August 22nd.

Post distribution, APE stock will trade independent of AMC shares. This means that traders can buy and sell AMC and APE separately, the shares will not be tied together as a package.

On the option side, current expirations available prior to the distribution will become non standard, with deliverables of 95%/5% AMC/APE shares. After the distribution, new options chains will be available that will trade based on the post distribution price. With the potential price of APE in the single digits, it’s unlikely that options will be issued for the APE shares.

The Foundation for Secure Markets August 10 Contract Adjustment

Comparison between AMC preferred equity units and common stocks

AMC Stock Outlook and Current Trading

AMC and APE have both been trending lower since the distribution, with AMC trading around $8.25 and APE around $5.00. AMC standard options have been offered, while APE still trades without options. There has be no news from the OCC as to when or if APE options will be offered.

Trading AMC stock is less about fundamentals and more about sentiment. Option pricing is heavily inflated due to huge volume, interest, and speculation, which has driven large day to day price fluctuations in the stock. With an implied volatility north of 100% (according to the tastytrade platform at the time of writing), the option market is implying that the stock could be zero, or double, from its current price over the next year.

Create a tastytrade account or log in (learn more about opening an account at tastytrade)

tastytrade, Inc. and tastylive, Inc. are separate but affiliated companies.

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

Related Posts

tastylive content is created, produced, and provided solely by tastylive, Inc. (“tastylive”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastylive is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer.  Options, futures, and futures options are not suitable for all investors.  Prior to trading securities, options, futures, or futures options, please read the applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange-Traded Options Risk Disclosure found on

tastytrade, Inc. ("tastytrade”) is a registered broker-dealer and member of FINRA, NFA, and SIPC. tastytrade was previously known as tastyworks, Inc. (“tastyworks”). tastytrade offers self-directed brokerage accounts to its customers. tastytrade does not give financial or trading advice, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastytrade’s systems, services or products. tastytrade is a wholly-owned subsidiary of tastylive, Inc.

tastytrade has entered into a Marketing Agreement with tastylive (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade. tastytrade and Marketing Agent are separate entities with their own products and services. tastylive is the parent company of tastytrade.

tastycrypto is provided solely by tasty Software Solutions, LLC. tasty Software Solutions, LLC is a separate but affiliate company of tastylive, Inc. Neither tastylive nor any of its affiliates are responsible for the products or services provided by tasty Software Solutions, LLC. Cryptocurrency trading is not suitable for all investors due to the number of risks involved. The value of any cryptocurrency, including digital assets pegged to fiat currency, commodities, or any other asset, may go to zero.

© copyright 2013 - 2024 tastylive, Inc. All Rights Reserved.  Applicable portions of the Terms of Use on apply.  Reproduction, adaptation, distribution, public display, exhibition for profit, or storage in any electronic storage media in whole or in part is prohibited under penalty of law, provided that you may download tastylive’s podcasts as necessary to view for personal use. tastylive was previously known as tastytrade, Inc. tastylive is a trademark/servicemark owned by tastylive, Inc.