CEO Robin Li said that the Chinese market for AI “is on the verge of experiencing explosive growth in demand, releasing unprecedented and exponential commercial value.” The AI explosion is certain to lead to a rush of new marketing positions and slide presentations for any company that can think of a way to latch onto it. Baidu’s stock was up about 7.7% in premarket trading on Wednesday.
Coinbase Global Inc. (NASDAQ: COIN) traded down about 1.5% in the premarket after a bigger-than-expected per-share loss in the fourth quarter. Revenue beat the consensus estimate but fell by nearly 75% year over year. Looking ahead, the company said that it would be focused on the regulatory environment this year and it did not rule out further layoffs in its quest to post positive adjusted EBITDA “in all market conditions.”
The topper in Wednesday’s premarket has to be AMC Entertainment Holdings Inc. (NYSE: AMC). On Tuesday, the Allegheny County (Pennsylvania) Employees’ Retirement System sued the company for increasing the number of shares outstanding without getting the approval of current shareholders. Shares added nearly 17% Tuesday. So much for being afraid of lawsuits.
We discussed the company’s plan for its end-run around shareholders earlier this month. Essentially, AMC authorized 1 billion preferred equity units (NYSE: APE) that have the same economic and voting rights as 100 shares of AMC’s common stock. Existing shareholders were given 1/100th of a preferred share for each common share they owned. AMC also sold APE shares to raise cash, and a hedge fund (Antara Capital) bought a truckload.
Now, AMC has announced a shareholders’ meeting for March 14 at which shareholders will get a chance to vote on increasing the number of authorized shares of common stock. Sort of. Shareholders are being asked to approve a 1-for-10 reverse common stock split “to enable conversion of AMC preferred equity units into shares of common stock.” Immediately after the reverse split is approved, the conversion of APE shares into common stock will take place, and then common shareholders will get to vote on increasing the number of common shares outstanding.
Holders of APE shares are virtually certain to vote their shares to increase the number of authorized shares AMC may issue. That includes large APE holders like Antara Capital. AMC management has virtually guaranteed the outcome. AMC stock closed at $6.10 on Tuesday. APE shares closed at $2.21.
Originally published at 24/7 Wall St.
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