August 24, 2022 - 11:49am EST by
2022 2023
Price: 7.30 EPS -1.27 0
Shares Out. (in M): 517 P/E N/A 0
Market Cap (in $M): 3,775 P/FCF N/A 0
Net Debt (in $M): 4,475 EBIT -930 0
TEV (in $M): 8,250 TEV/EBIT N/A 0

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Shameless copycatting of an idea shared by Chanos on CNBC yesterday, I'm keeping this brief in the interest of timeliness. AMC Entertainment issued a preferred equity unit on a 1:1 basis as a special dividend to common shareholders. The new preferred units began trading on Monday. They are economically equivalent to common shares. Here is a link to FAQs on the SEC’s website


 A few excerpts with emphasis added:


As I write this, there is about a 23% spread between AMC common stock (NYSE: AMC) and these new preferred equity units (NYSE: APE). I expect this spread to compress in the coming weeks/months as the market fully absorbs this new information.

APE units trade on NYSE and are very liquid, with $134mm of volume traded already today. this creates an opportunity to short AMC/buy APE and make the ~23% spread.


I do not hold a position with the issuer such as employment, directorship, or consultancy.
I and/or others I advise do not hold a material investment in the issuer's securities.


Arbitrage spread compresses

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