The hit-pandemic movie chain AMC Entertainment has used its “stock meme” status to launch several opportunistic fundraisers this year and pull itself off the brink of bankruptcy, but it appeared Tuesday to have hit the limit of that. that there are tolerant stocks.
The company said it was canceling plans to create as many as 25 million new shares, which could be sold to raise more than $ 1 billion based on Friday’s closing price, following investor feedback.
The plan was to go to a vote of no confidence later this month.
“It’s no secret, I think shareholders should authorize an additional 25 million AMC shares,” Adam Aron, the company’s executive director, wrote in a tweet. “But what YOU think is important to us. Many do, some don’t. AMC doesn’t want to proceed with such a split.”
AMC shares have risen this year as retail investors have exploited the stock, making it one of the most talked about investments after the GameStop retailer. AMC has exploited the fervor from raising $ 1.25bn through the sale of shares between April and June.
The moves, however, have pushed the number of shares that AMC is allowed to issue toward a limit set in its incorporation documents. The company made a previous attempt to raise that limit earlier this year, but this was also withdrawn when it became apparent that it would not gain shareholder support.
On Tuesday, Aron said the company will not make a third attempt before 2022. The stock market was up 3 percent in pre-market trading at $ 53.60 after abandoning the attempt to raise its clearance. of stock account.
AMC has entered the pandemic with more than $ 4.5bn in debt and more than $ 450 million in deferred rental payments, according to analysts, but its ability to raise new funding means it has been going through a health crisis that has closed most of its cinemas for several months.
The stock has grown more than 2,300 percent since the end of 2020 and the company now has more than 3m of retail shareholders, making up 80 percent of the stock base, compared to 10 percent at the beginning of the year, according to analysts.
Aron carefully adjusted investor favor to retail, including the offer to shareholders free popcorn last month and appealed to the meme culture by giving interviews on Zoom without pants.