Entertainment Holdings (AMC) arb, mcap=$3.4bn, price $6.53 vs $7.4

$AMC/$APE pitch:
– Arbitrage play between $APE & $AMC stock – both economically equivalent.
– 23% spread.
– However, borrowing for AMC is tight and there is a short-squeeze risk.
– New APE-preferred securities were created for AMC to have issuance currency without requiring shareholder approval.

$AMC/$APE valuation: Economically equivalent APE preferred trades at 23% spread to AMC common stock.

Exp. gain: 23% upside.

Full AMC / APE write-up (free guest account required):

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