AMC Entertainment Holdings' shares tumbled nearly 40 per cent in premarket trading on Monday after UK-based Cineworld's warning of a possible bankruptcy spooked investors ahead of the American cinema chain's preferred stock listing.
"The AMC distribution of"APE" is somewhere between a stock split and a stock dividend," said Rick Meckler, partner at Cherry Lane Investments. The decline in AMC shares was sparked after Cineworld, which owns Regal cinemas in the United States, warned that it was staring at a possible bankruptcy filing as it struggles to cut debts that soared during the pandemic.
"A broader change in how previous cinema-goers want to watch the latest hit is a trend unlikely to reverse or get any easier for cinema chains," said Sophie Lund-Yates, analyst at Hargreaves Lansdown