- AMC’s shares surged 23% on Monday after a judge scheduled a hearing for shareholders suing the company.
- Shareholders have accused the chain of diluting voting rights with its share conversion plan.
- This strain became popular as a Reddit meme strain in 2021.
Shares of AMC Entertainment Holdings — a company made popular by a hot meme stock on Reddit about two years ago — surged 23% to $7.61 on Monday. A day ahead of Q4 earningsthanks to good news for shareholders on the legal side.
A Delaware judge agreed to uphold a request for a preliminary injunction hearing from a group of shareholders accusing them of adding more shares while sidestepping a string of investors. Reuters I will report on Tuesday.
The ruling follows the pension fund’s application for the Allegheny County Employee Retirement Plan. class action lawsuit On Feb. 20, AMC said it tried to “circumvent” the will of common stockholders last year by issuing preferred stock. — rear shareholder Rejected a proposal to issue more common stock.
Investors in the cinema chain are expected to vote on March 14th to convert preferred stock to common stock. This increases the pool of common stock and dilutes the voting rights of common shareholders.
However, an injunction hearing is scheduled for April 27, after a scheduled vote, indicating that the conversion may take longer than expected.
This boosted market sentiment and sent AMC’s common stock soaring. Meanwhile, the company’s preferred stock fell 5.1% on Monday, widening losses in after-hours trading.
AMC shares surged amid growing overall bullish sentiment among retail investors, according to London-based consultancy Banda Research. Thanks to this, the S&P 500 is up nearly 4% so far this year, while the Nasdaq 100 is up 10% over the same period.
Insider Phil Rosen reported Thursday that the rally is like the meme stock boom of 2021.
Forum chatter has caused big swings in the stock prices of companies like game stop GameStop’s stock surged nearly 1,000% in two weeks in January 2021 after retail traders banded together to buy up the stock.