THE BACKDOOR DILUTION – Order of Events for AMC’s Dividend – Calling It Now via /r/wallstreetbets #stocks #wallstreetbets #investing

THE BACKDOOR DILUTION – Order of Events for AMC’s Dividend – Calling It Now

  1. Dividend issued in August
  2. $AMC commons on the balance sheet still show 516 million shares authorized and 516 million shares issued and outstanding. But now, there are 50 million Preferred shares*1 authorized and 5.16 million shares issued and outstanding also on the balance sheet.
  3. $APE coin initially trades at an 40-45% value of whatever $AMC was trading at the day before the split.
    1. example: $AMC = $20, then $APE = $8.50
  4. $AMC's price falls and $APE increases in price with respect to each other. So if $APE = $8.50 then $AMC = $11.50 (which totals back to the $20)
  5. There are some initial troubles with all shareholders receiving the dividend, but eventually, everyone receives what they are owed and therefore the pseudo "share count" reveals there aren't 29 billion synthetic AMC shares as the mouth breathers believe.
  6. A few weeks go by and $AMC and $APE are now arbitrage plays until the vote for the preferred share conversion takes place.
  7. The share conversion vote passes because every $APE has the same voting rights as $AMC commons and $AMC mouth breathers don't understand the negative implication of actually voting yes. Now $AMC and $APE will trade almost 1:1 in price due to the ability of conversion, although a very small arbitrage will still be available to profit off of.
  8. A few more weeks go by and Adam Aaron announces a dilution of $APE by the means of an at-the-market issuance of $APE of around 100,000,000 shares (which is 10,000,000 Preferred shares added to their issued and outstanding) and raises $1 billion dollars (assuming a price of $10 per share).
  9. $AMC mouth breathers celebrate in the masses thinking fat cat Adam Aaron's pounce plan was a success and issuing $APE raised the company money out of thin air.
  10. A few weeks go by and some $AMC mouth breathers actually start understanding what just happened and how their stock was diluted through a backdoor $AMC opened in 2013 by voting yes on the authorization of Preferred shares.
  11. Adam Aaron tries to issue 100,000,000 $APE again and this time shareholders vote no because they realize their bags are so heavy they might start generating their own gravitational force.
  12. A year or two later, $AMC runs out of means to raise capital as their attendance is still 50% of 2019 levels and their shareholder base has completely lost faith in management, so they restructure or go bankrupt.

\1: they purposely made the conversion of $APE to $AMC a confusing 2-step process so they can avoid scrutiny from shareholders who don't look into it or would never understand it in the first place.*

1 $APE does not = 1 $AMC. In reality, 1 $APE = 1/100 (one one-hundredth) of a Preferred share and 1 Preferred share = 100 $AMC. Therefore, 7 $Ape = 7/100 of a Preferred which = 7 $AMC (7/100\100 = 7)*

and $AMC currently has the ability to issue 5 billion $APE shares (50 million Preferred shares) because they've already authorized them.

This is a really sneaky and honestly quite evil play by Adam Aaron. He is assuming his shareholder base is a collective of blind people hopped up on Memestock Dew who are holding his hand waiting to cross the street once the light turns green. And from what I can see on social media, he is right. Too bad once they start crossing, they will all get hit by a semi-truck because the light was red the whole time.

Mark my words. Posted on 8/6/2022.

Submitted August 06, 2022 at 11:13PM by wetdirtkurt
via reddit