Movie theater chain AMC Entertainment (AMC) on Tuesday said it decided not to seek shareholder approval for a proposal that would have allowed it to issue as many as 25 million extra shares. AMC stock fell, while other meme stocks were mixed on Tuesday.
AMC initially laid out that proposal in a notice for its annual shareholder meeting, set for July 29. But CEO Adam Aron said the company was trying to take shareholder sentiment into consideration.
“It’s no secret I think shareholders should authorize 25 million more AMC shares,” Aron tweeted on Tuesday. “But what YOU think is important to us. Many yes, many no. AMC does not want to proceed with such a split.”
He added that the company wouldn’t make any more requests to boost share count this year. And he said there would be “no voting before 2022 on more shares.”
Voting on the other four issues requiring shareholder approval at the meeting will proceed as planned, he said.
When the chain announced the proposal last month to holders of AMC stock, the company said it could use shares to reduce debt, invest in its theaters and to help with mergers and acquisitions.
“AMC may face challenges and may uncover exciting opportunities as we emerge from the impact of Covid-19,” it said last month. “To successfully navigate the road ahead, we need to assemble all of the tools that might help us, and an important tool for any company is having shares available to issue if the right opportunity arises.”
The proposal, if approved, would have raised the total number of shares AMC had the authority to issue by 25 million to more than 549 million total. AMC said approval didn’t mean the shares would actually be issued, and that they wouldn’t be issued before next year.
AMC Stock, Other Meme Stocks
After rising earlier in the session, AMC stock closed down 3.85% at 49.96 on the stock market today. Among other meme stocks, GameStop (GME) slid 1.6%. BlackBerry (BB) rose 0.7%. Tilray (TLRY) lost 3%.
GameStop on Tuesday said it entered into a lease of a 530,000-square-foot facility in Reno, Nevada in an effort to expand its fulfillment network. The video game retail chain said it expects that facility to be up and running next year.
The facility, GameStop said, “will position it to grow product offerings and expedite shipping across the West Coast.” The move follows GameStop’s decision to lease another such facility in Pennsylvania.
The bull case has been for a big expansion of its digital growth.
AMC stock, GameStop and other names have rocketed higher and then lost steam this year. Retail investors, possibly egged on by users on Reddit and elsewhere online, have raced to scoop up shares but then bailed just as quickly.
AMC has raised millions via at-the-market offerings this year. And it has tried to find ways to engage with its retail shareholders more directly.
Ratings for other meme stocks generally aren’t ideal either, by IBD’s metrics. And many of the companies that have been targeted by the meme-inspired buying spree face challenges to their businesses.
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