Shares of the movie theater chain AMC fell 24% on Monday. That’s after a judge recently approved a complicated stock maneuver the company is planning.

AMC wants to consolidate two types of stock the company offers: AMC’s common stock, and what it calls its preferred shares.

The theater chain said the move will make the company more resilient, after demand for movie tickets plummeted earlier in the pandemic.

AMC has been trying to issue stock to raise money and pay down debt.

But the company hit a limit on how much common stock it could issue, said Steven Davidoff Solomon at UC Berkeley.

“So they hired smart lawyers who figured out a way to work around the issue, by issuing out preferred shares,” Davidoff Solomon said.

Preferred shares are a lot like normal stocks, but Matthew Spiegel at Yale said they often lock companies into paying out regular dividends.

And those dividends aren’t tax deductible.

“So, generally, firms don’t really like to have a lot of preferred stocks floating around,” he said.

Now, AMC’s plan to convert its preferred shares into more common stock has a lot of investors nervous that the move will basically dilute the stock’s value.

But Jay Ritter at the University of Florida said the company likely wants to put this unusual stock situation behind them.

“And just get back to being a normal corporation with common stock outstanding,” Ritter said.

AMC’s CEO said simplifying the stocks it offers will help it raise money more efficiently in the future.