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AMC stock falls amid plans to address debt, capital structure vote

Yahoo Finance Live looks to AMC shares as the entertainment company evaluates its debts and stock structures.

Video transcript

[ELECTRONIC BEEP]

- So my triple play today is AMC Entertainment. The stock plummeting down right now about 8 and 1/2 percent despite a plan to eliminate its heavy debt load. AMC saying in a securities filing on Friday that it plans to hold a shareholder meeting on March 14 to vote on a revamp of its capital structure, which, if approved, would enable the company's APE unit to be converted into common stock.

Now, some analysts like Eric Wold at B. Riley Securities believes this is a, quote, "massive equity raising opportunity." However, the share reaction today is likely some short term frustration on the part of investors since converting APEs to common stock would dilute the value of existing shares. But from a long term standpoint, this could be a great thing for AMC's balance sheet. And if you're a shareholder of APE, you're certainly happy today because that stock is up around 15% at this point.

- Not if you are a shareholder of AMC. You mentioned Eric Wold. He's going to come up on the show in the 4 o'clock hour to explain the proposal, the short term versus long term. [INAUDIBLE] But let's talk about with him the actual fundamentals of this company beyond this reverse split. What is the upside of this company five years from now? How do they survive? So much debt laden. Are these theaters going to come back? I got a lot of questions beyond the stock move about what makes this company tick down the road.