If you happen to be in AMC 8 there's a very, very good chance that you know Recently, there's some big news. We are now being presented with the opportunity to merge Ape back into AMC and for good reason. This is prompting a whole host of questions because it isn't just merging ape back into AMC, it's also a 10 for One reverse split. Now, if you haven't seen my most recent video on this, that's the one.

and I'll make sure it's linked in one of these directions. Kind of breaks down the actual SEC filing uh, the exact specifics and I'll make sure to link it below. But I implore everyone who's involved in AMC or Ape to check that out before I get into Wall Street takes on the situation I Do want to let you know in this video just based on some of the main questions. I'm getting back at the end of this I will be addressing what happens in this whole scenario if the vote isn't affirmative and you only own AMC If you only own a what happens if you own AMC and ape, that's the main question I'm getting so I want to get into that but before that I Want to let you know some of the interesting, positive bullish apish development.

At least we're hearing from some of the mainstream Financial reporters of the current situation on Market Watch. according to James Rogers AMC's eight conversion, a massive opportunity to wipe out debt and drive expansion. Now, obviously, if you are someone hunting for this short squeeze, if you or someone who's hunting just to be an ape and take out the Wall Street shirts, this is music to your ears AMC Entertainment Holdings Push to convert its AMC preferred Equity units Apes into common stock is a massive opportunity in the company's battle to eliminate debt. So this is a little bit more of a fundamental discussion when you're talking about that because obviously with the squeeze you're talking about kind of a short time frame relative to like a multi-year but like shorter time frame High volatility.

This, we're obviously going to be talking about the 5.325 billion in debt that AMC has. will this be an opportunity to fix this situation which would obviously be a fundamental Improvement for AMC as a business and obviously that would improve its long-term trajectory. The movie theater chain and meme stop Darling announced a special meeting of shareholders to increase the number of AMC authorized shares from just over 524 million to 555 million and authorize a 1 for 10 reverse split of the company's common stock converting Apes into shares of common stock. You don't just get one of these, you get both.

They're either both going to happen or neither are going to happen so you might see it like well. Hang On we're authorizing shares but also the merge and also this reverse stocks. but it's either all going to happen or none of it's going to happen either. We vote to authorize more shares and on top of that, eight merches back into AMC And on top of that with ape now back in.

AMC There's also a 10 for One reverse stock split I Don't want to go off too much because I Explained this in more detail in the previous video which once again is linked below. But understand that stock splits and reverse stock splits do not create or destroy value. Basically, it's the metaphor I Always go with. In this scenario, you're either taking one ten dollar bill and transforming it into ten one dollar bills.

That would be a normal stock split and a reverse stock split is taking ten one dollar bills and transforming it into one ten dollar bill. So the amount of bills in this metaphor is the amount of shares that you have, but you still have ten dollars. It's much easier to wrap your head around this if you're thinking about it in terms of your total investment. So I just want to put that out there.

Now that is the theoretical argument. In reality, there are certain financial implications when you're like talking about the options market. and that's another big question that I'm getting. So I'll answer that at the end of the video of what happens if you have options.

So I'll be answering that. But overall, understand theoretically this does not create nor destroy value. and one thing that I'm getting is we'll just have a new like cusp. ID Yes, it will, but understand that means absolutely squat zilch Nero zero for a short squeeze.

Like people are saying, well, with the new ID that means that sorts have have to cover. No, it doesn't. That's silly. There's no evidence whatsoever that backs that up.

So will there be a new ID if this is voted on in the affirmative 100, But with the new ID, that doesn't mean that shorts are forced to cover I Just want to make that explicitly clear, Given that Ape unit holders essentially control the vote at 64 percent of combined Holdings and may not get another chance to extract value from those units, we expect the two proposals to pass Vote for this to open the door to a massive Equity raising opportunity for the company in coming years. So that increased likelihood of this being voted on in the affirmative. Exactly why recently you're seeing AMC go down and ape go up Because it increases the Arbitrage opportunity. It increases the likelihood of price parity, which increases more people playing the Arbitrage.

If you've never heard that before, it's basically saying hey, AMC and Ape both have the same legal and financial claim to the company, Which means that they should trade at the same price. Right now, they're trading at just around between 250 and three dollars. Discrepancy see which means that Delta could be captured So people are going to go short on the more expensive one, long on the least expensive one the Lesser expensive one, until there's some sort of parity hit and the fact that most people are looking at the situation saying hey, we think they do have enough to control the vote that basically makes the Arbitrage opportunity more enticing. I Want to explain that because I think it's good for people to understand what Arbitrage trading is but I'm not personally trading it I'm not necessarily saying it's appropriate for you I just want you to know why as this is seeming more and more likely.

that's exactly why you're seeing AMC kind of drift down in ape drift up because of Arbitrage Not only could this help the company eliminate all balance sheet debt as the exhibition industry continues to recover, but it could allow management to pursue additional diversification options to drive incremental growth within the Greater Media industry. AMC As of December 22nd said that it was seeking a 1 for 10 reverse split. The special meeting of shareholders is scheduled for March 14th. That's when you're going to be vote.

Assuming that the current AMC stock price holds the vote, the reverse stock split would open up the door to roughly 22 billion in equity. Capital So it's not necessarily the reverse split. it's everything else in this because remember the current situation. if you were looking just at AMC stock, not the company, but AMC stock.

As of now, the leadership team. they kind of have their hands tied behind their back. we in the past did not authorize more shares for them. which means that they couldn't sell more stock as in dilute it to the public markets to raise more Capital That's why we have a a lot of people have this misconception that Ape was created by Adam Aaron to help us like shine a light on synthetic shares and illicit shorting and all that.

That's not why he made it. He made it because he wanted a way to be able to raise. Capital I.E Dilute the stock to raise money. That's what deluding is is you're basically selling more I.E The dilution to raise Capital To ideally improve the business, well, the public.

They actually had to pull the proposal because so many people were against it and then you using the preferred stock. That's how they created a So it was a backdoor dilution. So as of right now as the the time that I'm filming this, the leadership team of AMC cannot dilute AMC. But that's not true about A.

They can do that with Ape and they have a lot more shares to potentially sell to the world. So what they want to do is merge Ape back into AMC and then with the same rights that they have on a where basically they can dilute it at their will. They would then also have the ability to do that with AMC. I'm not saying that's right or wrong.

It kind of depends on how you view the situation. I Just want to let you know that upon this merge and reverse stock split the potential new money, the 22 billion in equity value would come from the new increase in additional dilution that they could do. Now, will it ever be that much? No. because by the time you sell that much, obviously you're diluting so the price goes down.

So this is a little bit of fictitious math. It really is because they're saying well, if you could sell all the shares at that price and it doesn't go down at all, even though that's an immense selling pressure, you could raise this much. but it's just not true. And obviously I know that's a big number, but understand that this is just kind of a poor statement.

It's poor math. It's a poor understanding of how this would work in reality. In reality, anytime AMC has announced a dilution, the Stock's gone down, and then anytime they announce that they've completed the dilution, the stock goes back up. That's historically of things that played out over the past two years: AMC Exited the physical third quarter with 5.325 billion debt and with cash and cash equivalents of 684 million.

So they're really dipping into their War chess and they don't have the most to show for it. Unfortunately, with our projection that AMC is unlikely to turn free cash flow positive until 2024, with multiple tranches of debt set to mature in the coming years with a higher interest rate environment, We Believe Debt reductions is top of mind for the management. It definitely is. We suspect that the opportunity to raise billions of dollars in equity provides that path, so this is what they're doing.

obviously. Adam Aaron and the related team is hyper focused on the long-term viability of the company. They don't care about the squeeze that that's just not something that they're going for that's not their job, that's not. That's literally not what they're employed to do.

They are employed to ensure the success of the business in the long term. And right now, they really couldn't take that much of an advantage of the squeeze, so they're probably not even interested in that because as we all know, the entire leadership team unloaded as many shares as they possibly could at the elevated price levels of AMC before the debut of Ape. Once again, if either proposal fails, there is no conversion of Ape units into AMC comment shares, and we would suspect Ape units could potentially decline two price levels at the time before the announcement on December 22nd or below a dollar. So this is kind of becoming a high risk High reward scenario for the success and or failure of Ape: I'm not telling you how to vote I just want you to have more information and you should do your own research.

Don't trust in what you're reading on Twitter Trust I guess but verify same thing with Reddit Same thing with wherever you're watching this. This is a good place to get started. but I implore you to read the SEC filings yourself. I think that is of Paramount importance.

Now to get back to the questions that I'm getting more of recently. If you own AMC this will impact you the same as if you own Ape as if you own AMC or ape. Basically, if this is voted on in the affirmative, Whatever shares you have of AMC and Ape, you add everything up and then you divide by 10.. if you have a hundred shares of ape, 100 shares of AMC, that would be 200, you divide it.

by 10, you have 20.. if you only have 200, AMC you still end up with 20. if you have 200 Ape, you still end up with 200. AMC Everything is going to transform into AMC.

You add all the numbers up, you divide it by 10 and you just write AMC Buy it. That's the basic math of the situation of how this is going to work out. Now that's what happens if you have shares. Basically all roads lead to the same destination.

with AMC Ape or AMC and Ape, you add it all up. You divide by 10. Now, if you have options, this is going to get into a situation that's referred to as being made whole and basically your people are going to end up with non-standard Options! to represent like the transformation of what we currently have to the next thing. But once again, the tldr of this please feel free to Google like options being made whole if you want more information, but they're going to be adjusted accordingly for you where no value is gained or lost.

They're just going to do the mathematical calculation in the back end and the new non-standard Option will be showing up in your account. So those are the main questions I have been getting about ape versus AMC or having all three what's going on with options. If you have any other questions, please comment them below. and really I think I forgot to ask this in the last video if you made it to this point.

Thanks! You are an absolute legend for making it to the end of the video. But what I really wanted to say here is what are your thoughts: I Don't want to tell anyone how to this is your money on the line and I think you're responsible enough to do your own research and realize what is best for you But below Comment: Are you gonna vote in the affirmative or are you going to go against it and you don't want this to merge back together? Let me know in a comment below.