Antara Capital is cutting its stake in AMC Preferred Equity Unit (NYSE:APE) stock. As of this writing, Anatara doesn’t own any common AMC Entertainment (NYSE:AMC) stock.
Filings with the Securities and Exchange Commission (SEC) show the hedge fund both buying and selling shares of APE, with small profits, before launching a selling operation on Aug. 7 in the face of rising prices.
The hedge fund, run by Himanshu Gulati, has been an active participant in the APE stock market. The fund had 6.5% of APE on Aug. 4, down from 9.9% on June 22.
Escape From the Planet of the APEs
Small investors piled into AMC stock in 2021 to fight shorts, the first act of the “meme stock” wave. In 2022, in order to raise funds to pay off debt, AMC CEO Adam Aron launched AMC’s preferred shares, or “APEs.” And some hedge funds, like Antara, joined in on the meme stock action, encouraged by Aron.
If Antara is getting out of APE stock, it could mean an end to the fun and games.
At one point, Antara held 30% of the APE shares. It was sued in June for its short-term moves in AMC and APE over laws meant to prevent insider trading. The fund has sought to block the release of confidential court files in that case, saying they could “threaten the health and safety” of employees.
Antara has also been involved in other troubled companies, like Arrival (NASDAQ:ARVL), which has been seeking to make electric vehicles. Arrival canceled a special-purpose acquisition company (SPAC) merger last month after Antara ended plans to lend $25 million. A $20 million loan from Antara to Arrival was converted into equity in June. Arrival now has a market capitalization of $31 million.
Gulati launched Antara in 2018 after heading a distressed situations group for Man GLG, an alternative investment fund. The initial fund got a $150 million investment from Blackstone (NYSE:BLK) and $150 million from Corbin Capital Partners. Gulati promised to put money to work quickly at a time when the distressed debt industry had over $66 billion in cash to invest.
APE Stock: What Happens Next?
Antara means opportunity in Sanskrit. If big players now see an opportunity to get out of APE stock, it could spell trouble for small investors who remain in.
As of this writing, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
