AMC Says It Won’t Seek Shareholder Approval To Increase Outstanding Shares

AMC Entertainment said on Tuesday it had filed a proposal that would have asked its shareholders to allow the movie channel to issue up to 25 million additional shares.

In a filing with the Securities and Exchange Commission, the company said the proposal was taken off the agenda of its next annual meeting of shareholders.

AMC shares jumped nearly 4% in pre-market news trading.

CEO Adam Aron also broke the news on Twitter, saying, “It’s no secret I think shareholders should authorize an additional 25 million AMC shares. But what YOU think is important to us. Many yes, many no. AMC does not want to continue. with such a split. “

Over the past few weeks, the company has been caught in a trading frenzy among retail investors who use platforms like Reddit to increase their stock selection. This has pushed AMC shares up more than 2,350% since the start of the year. The company’s market capitalization soared to over $ 26 billion.

Previously, AMC was looking to make more stock offerings to raise funds to allow it to fund potential acquisitions, including the purchase of ArcLight and Pacific theater sites that were shut down during the pandemic. He also said the funds could be used to pay off debt, reduce interest charges or pay off millions of unpaid rents.

Over the past few months, AMC had used sales of shares to raise new capital. Without these additional actions, Aron said the company would not have avoided bankruptcy.

AMC weathered the coronavirus pandemic through fundraising efforts that kept it operating, albeit with limited capacity. Vaccination efforts, relaxed Covid restrictions and new movie releases are now helping to keep customers coming back.

– CNBC Sarah whitten contributed to this report.