Why AMC Entertainment Plunged 37.4% in August?

$AMC Entertainment(AMC.US)$ $AMC Preferred Equity Unit(APE.US)$
In early August, AMC posted second-quarter earnings that showed a better-than-expected loss, although the company did miss on revenue. Yet even though bottom-line profitability was better than expected, AMC still burned $117 million in cash, because of high interest payments and capital expenditures.

Unfortunately, these numbers came in during a quarter with several box office hits, most notably Top Gun: Maverick. Meanwhile, the summer move slate is emptier, so those cash burn numbers could get worse. In fact, AMC's largest competitor, Cineworld $CINEWORLD GROUP(CNNWF.US)$ plunged last month after warning authorities in Europe that it may have to declare bankruptcy.

While AMC isn't going bankrupt in the near term, it still has a high debt load and just under $1 billion in cash. However, since AMC's stock price has been held up by meme-stock traders, it also has the potential to raise more money and survive. The only problem? Management promised its shareholder base about a year ago that it wouldn't dilute them any further.

To get around this, AMC launched a new class of preferred shares under the name APE, which began trading under the ticker APE on Aug. 22. These new shares are technically identical to AMC common shares, except they're labeled as preferred shares.