Okay, folks so we are at a critical point in the AMC APE drama.
I’m not going to pretend to understand anything. We are far beyond any sense of certainty I may have had early on. We are firmly in the deep faith quadrant where my mantra is, “God has not brought me this far for nothing.”
In an effort to keep it simple, this is what we need to know:
The record date and time is August 24, 2023, at the close of the New York Stock Exchange (4:00pm EST). This point in time will determine shareholders of record who are eligible to receive the Litigation Settlement Payment of one AMC share per 7.5 AMC shares held as of record day and time (8/24/23, 4:00pm EST) post-reverse split.
The Litigation Settlement Payment is different from the reverse split which are both different from the conversion. Frequently Asked Questions are linked and copied below.
The reverse split of AMC shares will happen first for AMC shares only. For every 10 AMC shares you own as of record date and time, you will receive 1 new AMC share as your Settlement Payment.
August 24th is also the last day that APE units will trade on the New York Stock Exchange. On Friday, August 25, 2023, APE units will convert to the new AMC shares at the 10:1 rate. Upon the AMC reverse split the night prior, 1 APE unit becomes 1/10th of the value of the new AMC shares. APE was not part of the class action lawsuit so it’s not part of the settlement. I believe this is why the APE conversion is a separate event on a separate day.
My only advice:
- Be alert.
- Watch your accounts.
- Make sure your phone apps are up to date and ready to trade should you decide to do so.
- Log in to make sure you have the functionality you need to buy, sell or transfer.
- Know your numbers for profit and loss.
- Have a strategy for shifting, exiting or continuing.
AMC Form 8-K filed August 11, 2023 with SEC
Link to Edgar: https://www.sec.gov/ix?doc=/Archives/edgar/data/1411579/000110465923090981/tm2323643d1_8k.htm
Frequently Asked Questions
1. Who receives the Litigation Settlement Payment? Just the plaintiffs or all AMC shareholders?
Following and contingent upon the Reverse Stock Split and the Conversion, AMC will be required to make the Litigation Settlement Payment to all record holders of AMC common stock (not just the plaintiffs) as of a record date, which will be fixed for the purposes of determining who is eligible to receive the Litigation Settlement Payment. The record date for these purposes is scheduled to be as of the close of business on August 24, 2023, which is the same date on which the Reverse Stock Split occurs but prior to the Conversion. Once the Conversion occurs, which is scheduled to occur on August 25, 2023, AMC will issue to the record holders of the AMC common stock the additional shares of AMC common stock in the Litigation Settlement Payment on or after August 28, 2023.
2. At what date is it determined who will get the Litigation Settlement Payment?
The record date for determining the record holders of AMC common stock who will be entitled to receive the Litigation Settlement Payment is scheduled to be as of the close of business on August 24, 2023, which is the same date on which the Reverse Stock Split occurs but prior to the Conversion. After the Conversion occurs, which is scheduled to occur on August 25, 2023, AMC will issue to the record holders the additional shares of AMC common stock in the Litigation Settlement Payment on or after August 28, 2023.
3. When will you implement the Share Increase, Reverse Stock Split and the Conversion and in what order?
The Share Increase and Reverse Stock Split must occur before the Conversion can occur in order to create the capacity in our authorized shares of AMC common stock to effectuate the Conversion. The Share Increase and Reverse Stock Split will occur on August 24, 2023 and the Conversion will occur on August 25, 2023, the business day following the Share Increase, as required by the terms of the APEs.
4. When will the Litigation Settlement Payment be made?
After the Conversion occurs on August 25, 2023, and contingent up the Reverse Stock Split, the Litigation Settlement Payment will be paid on or shortly after August 28, 2023 to holders as of the close of business on August 24, 2023.
5. After the Reverse Stock Split, the Conversion and the Litigation Settlement Payment, will I see applicable adjustments to my brokerage account immediately?
If you hold AMC common stock or APEs in brokerage accounts indirectly through DTC, such as an online brokerage account, the timing of adjustments appearing in your brokerage account for the Reverse Stock Split, the Conversion of APEs to AMC common stock, the Litigation Settlement Payment and any corresponding treatment with respect to fractional shares will depend on your individual brokers. If you experience delays, we encourage you to contact your brokers with any questions. If you hold AMC common stock or APEs directly with the Company’s transfer agent, Computershare, the timing of registration of shares of AMC common stock in connection with the Reverse Stock Split, the Conversion of APEs to AMC common stock, the Litigation Settlement Payment and the settlement of fractional shares and the mailing of updated statements and checks is a process that is expected to occur over several business days.
6. Can you provide examples of how my ownership will be affected by the Litigation Settlement Payment if I own 100 AMC shares and 100 APE shares? 100 AMC shares and 0 APE shares? 0 AMC shares and 100 APE shares?
100 AMC shares and 100 APE shares: On August 24, 2023, your 100 AMC shares would become 10 AMC shares (after giving effect to the Reverse Stock Split), and your 100 APE shares would be convertible into 10 AMC shares (after giving effect to the Reverse Stock Split, instead of being convertible into 100 AMC shares). August 24, 2023 is also the record date for the Litigation Settlement Payment with respect to the 10 AMC shares you hold as of that date. On August 25, 2023, your 100 APE shares will convert into 10 AMC shares, at which point you will hold 20 AMC shares in total. On August 28, 2023 or shortly thereafter, once the Conversion occurs, based on the 10 AMC shares you held as of the record date on August 24, 2023, you would receive 1 additional AMC share as part of the Litigation Settlement Payment (i.e. 10 AMC shares x 1/7.5 = 1.3333 AMC shares). No fractional shares will be issued by AMC to record holders. With respect to the 1/3rd share-equivalent entitlement, if you are a record holder that holds shares directly on the register of the transfer agent (rather than through a broker), the transfer agent will accumulate fractional entitlements, sell them and distribute cash in lieu thereof. Please note: if you are not a record holder, your broker may have a different way of dealing with fractional shares, such as recording a fractional entitlement in your account or delivering cash in lieu thereof.
100 AMC shares and 0 APE shares: On August 24, 2023, your 100 AMC shares would become 10 AMC shares (after giving effect to the Reverse Stock Split). August 24, 2023 is also the record date for the Litigation Settlement Payment with respect to the 10 AMC shares you hold as of that date. On August 28, 2023 or shortly thereafter, once the Conversion occurs, based on the 10 AMC shares you held as of the record date on August 24, 2023, if you are a record holder, you would receive 1 additional AMC share as part of the Litigation Settlement Payment (i.e. 10 AMC shares x 1/7.5 = 1.3333 AMC shares). No fractional shares will be issued by AMC to record holders. With respect to the 1/3rd share-equivalent entitlement, if you are a record holder that holds shares directly on the register of the transfer agent (rather than through a broker), the transfer agent will accumulate fractional entitlements, sell them and distribute cash in lieu thereof. Please note: if you are not a record holder, your broker may have a different way of dealing with fractional shares, such as recording a fractional entitlement in your account or delivering cash in lieu thereof.
0 AMC shares and 100 APE shares: On August 24, 2023, your 100 APE shares would be convertible into 10 AMC shares (after giving effect to the Reverse Stock Split, instead of being convertible into 100 AMC shares). On August 25, 2023, your 100 APE shares will convert into 10 AMC shares. Following Conversion, since you held 0 AMC shares as of the August 24, 2023 record date you would not be entitled to any additional AMC shares as part of the Litigation Settlement Payment.
7. How will the Reverse Stock Split and Conversion affect trading prices in AMC common stock and APEs?
Although we cannot predict specific trading prices, on August 24, 2023, the AMC common stock will start trading on a split-adjusted basis, which means one new share of AMC common stock is equivalent to 10 shares of AMC common stock prior to the Reverse Stock Split, and we expect trading prices will adjust accordingly. For comparability, the closing NYSE stock price of AMC on August 23, 2023, will be multiplied by 10.
August 24, 2023 will also be the last trading day for APEs, which will cease trading on the NYSE on August 25, 2023 as a result of the Conversion. However, during this last day of trading, the APE trading price will not adjust in the same way as the AMC common stock trading price, because after giving effect to adjustments for the Reverse Stock Split, 1 APE is convertible into 1/10th of a share of AMC common stock.
Accordingly, during the trading day of August 24, 2023, while the AMC common stock trading price post-split is comparable to 10x the AMC common stock trading price pre-split, the APE trading price post-split will remain comparable to the pre-split APE trading price.
8. How will the Litigation Settlement Payment affect option contracts?
AMC does not determine and is unable to provide interpretive advice on the impact of the Litigation Settlement Payment on the contractual terms governing options contracts.
9. How will the Reverse Stock Split and Conversion affect option contracts?
AMC expects that the deliveries under option contracts will be adjusted in the regular way to account for the Reverse Stock Split or, in the case of options contracts on APEs, the Conversion. However, AMC does not determine and is unable to provide interpretive advice on the impact of these events on the contractual terms governing options contracts.
10. Will short sellers be required to cover their positions before the Reverse Stock Split and Conversion?
AMC expects that the deliveries under stock borrowing arrangements will be adjusted in the regular way to account for the Reverse Stock Split or, in the case of contracts on APEs, the Conversion. However, AMC does not determine and is unable to provide interpretive advice on the impact of these events on the contractual terms governing stock borrowing arrangements.
11. How will short sellers be affected by the Litigation Settlement Payment?
AMC does not determine and is unable to provide interpretive advice on the impact of the Litigation Settlement Payment on the contractual terms governing stock borrowing arrangements.
12. What are the key dates?
Please see the Expected Timetable of Events above for more details.
August 11, 2023 • Status Quo Order is lifted August 24, 2023 • Reverse Stock Split occurs• Record date set for Litigation Settlement Payment as of close of business August 25, 2023 • Conversion of APEs into AMC common stock August 28, 2023 or shortly thereafter • Once Conversion occurs, Litigation Settlement Payment in shares of Class A common stock to be made to holders of Class A common stock as of the August 24, 2023 close-of-business record date 13. Will there be large failure-to-deliver (“FTDs”) like when the APE was distributed?
While we cannot predict the trading impact of these corporate events, given the significant transactions that will occur over successive trading days, it is possible there are large FTDs like when the APE was distributed.
14. Will I be taxed on the settlement?
AMC believes the Litigation Settlement Payment is a tax-free stock distribution for U.S. federal income tax purposes under Section 305(a) of the Internal Revenue Code, as amended. Stockholders should consult their own tax advisers regarding the tax consequences of the Litigation Settlement Payment.
15. What is my cost basis for the settlement?
The tax basis of a share of AMC common stock held prior to the Litigation Settlement Payment (“Old Share”) is allocated between the Old Share and AMC common stock received in the Litigation Settlement Payment (“New Share”) in proportion to the relative fair market value of the Old Share and the New Share on the date of the Litigation Settlement Payment. Stockholders should consult their own tax advisers regarding the tax consequences of the Litigation Settlement Payment.
Harvest Life 