Citigroup opens downside 30-day catalyst watch for AMC shares, sees downside pressure in coming days

AMC Entertainment Holdings Inc.’s stock
AMC,
-0.45%
fell 1% premarket Monday, after Citigroup opened a downside 30-day catalyst watch for the stock. The move comes as investors await a chancery court decision that’s expected to clear the way for the company to convert its AMC Preferred Equity units
APE,
-0.57%,
known as APEs, into common stock. AMC shareholders voted in support of the company’s proposal to convert the APEs in March, but the company was then hit with a class-action lawsuit. AMC subsequently reached an agreement to settle the court fight but a chancery judge must approve the settlement proposal after a two-day hearing last week. Citigroup is expecting a ruling in favor of the proposal. “As a result, we would expect the value of AMC common units and APE units to converge,” analysts wrote in a note. “Given AMC’s common units trade at a premium to the APE units, we would expect downward pressure on AMC shares in the coming days.” APE’s were trading down 0.6%.