The timing of this announcement coincides with not-so-positive news: AMC investors are suing the meme stock's higher-ups over a stock dispute.

Plus, analysts expect AMC's upcoming earnings report to be a huge miss. Here's what you need to know. 

See Also: 'This Is Terrible' - Major Brokerage Sounds Alarm On AMC, Meme Stocks

What Happened: While AMC saw marked strength during Monday's session when common shares jumped 28% in the afternoon, certain investors are worried.

That's because company bosses want to convert AMC Preferred Equity (NYSE: APE) shares into common shares.

Why It Matters: A conversion will "eviscerate" the voting power of common stockholders, investors say.

If AMC were to issue additional shares, it would increase the number of common stock being traded and, for existing investors, more shares being issued can dilute shares and tank the value of the existing shares for investors.

Common shareholders filed a lawsuit against the Leawood, Kansas-based company on Feb. 20 in an effort to block the conversion. 

What's Next: The conversion vote is expected to take place on March 14, but AMC will not act to increase the share count before a judge rules.

According to Seeking Alpha, a Delaware judge late during Monday's session agreed to hold a hearing on April 27.

See Also: AMC Arbitrage Traders Face Big Question - Will Preferred Equity Get Converted Into Common Stock?

What Analysts Are Saying: AMC will report its results for the fourth quarter and fiscal 2022 after the market closes Tuesday.

Benchmark analysts reduced their growth projections, citing a disappointing box office. Here's a breakdown:

AMC Price Action: The stock was trading down 5.2% at $7.20 midday Tuesday.

Next: What's A Death Spiral Convertible? Michael Burry Sounds Alarm On Meme Stocks

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