AMC shares fall after Cineworld's bankruptcy warning

STORY: Shares of movie theater chain AMC Entertainment dropped nearly 40% by mid-session Monday - the day its preferred stock listing started trading - after UK-based rival Cineworld warned of a possible bankruptcy.

That put a spotlight on the entire cinema chain industry and spooked investors in the meme stock darling.

Meanwhile, AMC's preferred stock, which trades under the ticker "APE" - a nod to the retail traders on reddit - rose on Monday.

AMC said shares of the preferred stock, intended as dividend, will have the same voting rights as common stock and could be used for raising capital in the future.

Trading of both classes of shares on Monday was halted multiple times in volatile trading.

Shares of AMC have been on a wild ride over the last two years, but the meme stock hit two-month lows on Monday.

Last week, AMC flagged a "relatively weak" film slate in the third quarter of 2022.

That echoed concerns from Cineworld, which said last week a lack of blockbusters was keeping movie-goers away and impacting its cash flows.

Cineworld, which owns Regal cinemas in the United States, said it's staring at a possible bankruptcy filing as it struggles to cut debts.

Global health crisis-related closures severely impacted the business of cinema operators.

But AMC managed to raise $1.8 billion last year, capitalizing on a rally in shares triggered by retail investors' interest in meme stocks, in a sharp contrast to Cineworld's fate.