AMC says won’t seek shareholders approval to boost shares outstanding

AMC Leisure mentioned Tuesday that it has tabled a proposal that will have requested its shareholders to permit the movie show chain to challenge as much as 25 million extra shares.

In a submitting with the Securities and Change Fee, the corporate mentioned the proposal has been withdrawn from an agenda for its upcoming annual assembly of stockholders.

AMC shares jumped practically 4% in premarket buying and selling on the information.

Chief Govt Officer Adam Aron additionally introduced the information on Twitter, saying: “It is no secret I feel shareholders ought to authorize 25 million extra AMC shares. However what YOU assume is necessary to us. Many sure, many no. AMC doesn’t need to proceed with such a break up.”

In latest weeks, the corporate has been caught up in a buying and selling frenzy amongst retail buyers that use platforms like Reddit to spice up their inventory picks. That has pushed AMC shares up greater than 2,350% yr to this point. The corporate’s market cap has ballooned to greater than $26 billion.

Beforehand, AMC had been seeking to do extra inventory choices to lift cash to permit it to fund potential acquisitions, together with shopping for ArcLight and Pacific theater places that have been shuttered throughout the pandemic. It additionally mentioned the funds may very well be used to pay down debt, scale back curiosity prices, or repay thousands and thousands in unpaid hire.

In latest months, AMC had been utilizing inventory gross sales to lift recent capital. With out these extra shares, Aron has mentioned the corporate wouldn’t have averted chapter.

AMC has navigated the coronavirus pandemic by fundraising efforts which have allowed it to proceed to function, albeit at restricted capability. Vaccination efforts, relaxed Covid restrictions and new film releases at the moment are serving to to drive prospects again.

—CNBC’s Sarah Whitten contributed to this reporting.