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AMC Shares Rally As CEO Abandons Proposal To Issue 25 Million More Shares

AMC Shares Rally As CEO Abandons Proposal To Issue 25 Million More Shares

AMC CEO Adam Aron on Monday decided to pull a proposal to lift the cap on the number of shares that AMC is allowed to issue from the company’s upcoming annual shareholders meeting, pushing AMC shares more than 3% higher in premarket trading.

The decision marks a reversal for AMC’s outspoken CEO Adam Aron, who has been pushing for shareholders to authorize issuance of up to another 25MM shares, which would allow the theater chain – which has already taken advantage of the run-up in its share price by issuing millions of new shares – to further capitalize on its lofty valuation. The company first disclosed the proposal, which was on the docket for its upcoming July 29 annual meeting, last month.

In a series of tweets Aron said that while he still believes issuing more shares would be in the company’s best interest, enough AMC shareholders have expressed opposition to the proposal to make management have second thoughts. Because of this, the proposal has been “officially tabled”.

If approved, the proposal would have increased the number of total shares by 25MM to a total of 549.2MM shares. Aron hinted that the company might revive the proposal at next year’s meeting.

In other AMC news, Aron announced last night that the company will show live MMA fights in its theaters offering ticket prices that are well below the cost of ordering these fights on pay-per-view at home. The first fight to air at the company’s theaters will be the upcoming McGregor-Poirier fight set for Saturday.

Trey’s Trades, one of the de facto leaders of AMC’s army of ‘apes’ – the diamond-handed investors who have helped bid up the stock – praised the move in a tweet, proclaiming that “AMC listens”.

It’s just the latest example of Aron’s radical management strategy of building an intense bond of trust with AMC’s dedicated army of retail backers. These efforts have also included the launch of a rewards program for shareholders, with perks like free popcorn.

Tyler Durden
Tue, 07/06/2021 – 08:29

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