APEs sink toward new low after AMC discloses deal for sale of up to $1.4 billion worth of shares

Shares of AMC Preferred Equity Units
APE,
+7.77%,
known as “APEs,” dropped 7.8% toward a new low in morning trading Monday, after AMC Entertainment Holdings Inc.
AMC,
-5.62%
disclosed a distribution agreement to sell up to 425.0 million APEs. At current prices, the movie theater chain could raise up to about $1.4 billion from the sale of more APEs. AMC said it plans to use the proceeds “to repay, refinance, redeem or repurchase” existing debt, and also possibly for general corporate purposes. AMC’s stock slumped 3.5% in morning trading. The APEs, which snapped a five-day losing streak by closing unchanged on Friday, have plunged 45% since closing its first day of trading on Aug. 22 at $6.00. Over the same time, AMC shares have sunk 26.3% and the S&P 500
SPX,
-0.44%
has dropped 10.6%.