Thread by @live2beingu

Good Morning everyone, I hope and entrust you had a good morning so far. Without further delay lets get into it shall we. So before I tie in the AMC S-3 statement lets go over what a Senior Convertible Note, Convertible Bond, and Collateralized Loans are? We will then go through

the recently filed S-3 document from AMC and wrap up with our conclusion.
Alright so lets look at and defined Terms:

Senior Convertible note: a short term debt security that contains an option in which the note can be converted into a predefined amount of the issuer’s shares. Senior Convertible notes are different from convertible bonds in that they include a call option and a priority for

recourse should the company go bankrupt. More importantly they allow companies to borrow money at a lower interest rate. Most importantly, they accrue interest that is later turned into shares. Further more, if redeemed they reduce company debt and increase its equity.

Convertible Bonds: are type of fixed income security that can be converted into common shares of the stock. Just like regular bonds they pay interest according to the specified coupon rate until you convert the bond into shares. Some of the benefits & disadvantages are:

- Investors enjoy a guaranteed income stream
- Downside is limited because the investor can recoup their original investment when the bond matures.
- Offer great potential for appreciation than ordinary corporate bonds.
- They are sensitive to rising interest rates,

as they are paid at a lower coupon rate than corporate bondholders.
- The loans given from these bonds are often times unsecured and you can be left holding the bag if the company goes bankrupt.

Collateralized Loan Obligation (CLO)– is a security backed by a pool of commercial or personal loans, structured so that there are several classes of bondholders with varying

maturities, called tranches.
Side Note: I’m not going to get too much into this topic as we don’t need to know it for this specific DD piece but I will bring it up in another DD piece in regards to the repo market. Now that we’ve defined some of the terms being used and

thrown around out of context.
Let’s get in this S-3 filing…Oh at this point please forget about Convertible Bonds and Collateralized Loan Obligations as they are not involved whatsoever in these documents.

On June 29, 2021 AMC filed what’s called a

Registration Withdrawal form in order to request that the SEC delete and/or destroy the original agreement as the new agreement made in September of 2020 was the binding contract agreement. Here is why….
In AMC originally S-3 File no 333-228823 it stated that “

On September 14, 2018 AMC sold $600 million principal amount of our 2.95% Convertible Senior Notes due 2024. The number of shares issued along side this would be at the time of redemption equal to 57.1428 shares of Class A common stock per $1,000 principal amount of the note

which came out to 34,285,680 shares to be registered alongside with the note offering.” Per page 52, line 2 of the filing Silver Lake came in and said we’ll give you the 600M in exchange for 31,662,240 shares of Class A Common Stock. This agreement was later amended on

March 5, 2020. This is part one. So at this point AMC receives their cash and then they essentially hold for Silverlake 31,662,240 shares. So everything is going all hunky dory when the unexpected happens…Covid19... one of the greatest economic and health disasters of our

lifetime. As a result, AMCs stock price started to fall due to a whole host of factors i.e. call it being shorted into oblivion, not having enough money to cover short term obligations as they came due, taking on more debt in order to stay afloat, and not having additional

streams of revenue that would help sustain its operations.
Keeping that in mind, fast forward to September 14, 2020. You and I both know that at that time AMC stock price had taken a big hit.
What I believe happened is that in order for them to remain and contract in good faith

AMC amended the amended contract from march to make up for the difference in the decline of market value for its stock. The new share total changed from 31,662,240 shares to be 44,422,860 shares to be exact. The additional shares allowed AMC to keep its originally requested loan.

Okay L2B,I get that. They borrowed 600M initially thinking that the price would be this but then covid hit and the agreement needed to be amended and updated to make the note holder whole as they didn’t know what was going to become of AMC and most likely requested more shares.

Amending the agreement was the right thing to do.

So why does this RW & S-3 form matter? It honestly doesn't. That's what so funny about all of this. Let me explain why... On January 27, 2021 Silverlake converted the note into equity in AMC. Upon doing so, it was able to sell

all of its 44,422,860 shares on the open market place and made a little bit over 113M in profit. By converting its shares Silverlake removed the liability off of AMC’s books but created an equity position for themselves not to mention after they sold the shares it gave Apes

more shares to buy.
Knowing what we do now i bet they wish they would've waited to convert and sell their shares at a higher pricepoint. Silverlake paper handed at the first sign of a price increase. #justsaying.
Okay L2B, I get that but why file the form now….well here is

what I think happened at the time of the transaction is AMC simply forgot to file the administrative paperwork with the SEC at the time. With so many things going on, I imagine that the person responsible just got sidetracked and is just now able to get the RW form to the SEC.

In conclusion, this specific RW form has nothing to do with AMC at this time as the S-3 forms intended purpose was completed and the agreement closed on 1/27/21. In my honest opinion this whole thing was a Mr. Toads wild ride adventure to get you riled up and upset that AMC was

shady and AA is bad. This shit ended up being a huge big pile of NOTHING. I mean absolutely nothing for you to be concerned about. I hope that helps. I'll catch up with you guys a bit later. Have a great rest of your day. @threadreaderapp unroll #AMC