Pedestrians pass an AMC theater in New York.
Scott Mlyn | CNBC
AMC Entertainment said Tuesday that it had tabled a proposal calling on its shareholders to allow the cinema chain to issue up to 25 million more shares.
In a filing with the Securities and Exchange Commission, the company announced that the proposal had been removed from the agenda of its upcoming annual general meeting of shareholders.
AMC stock rose nearly 4% on the news in pre-market trading.
CEO Adam Aron also announced the news on Twitter, saying, “It’s no secret that shareholders should authorize 25 million more AMC shares. But what YOU think is important to us. Many yes, many no. AMC does not want to proceed. ” with such a split. “
For the past few weeks, the company has been embroiled in a trading frenzy among retail investors who use platforms like Reddit to improve their stock picks. This has driven the AMC share by more than 2,350% in the year to date. The company’s market cap has surged to more than $ 26 billion.
AMC had previously looked for additional stock offers to raise funds to fund potential acquisitions, including the purchase of ArcLight and Pacific theater locations that closed during the pandemic. The funds could also be used to pay off debts, lower interest costs, or pay off millions in unpaid rents.
In the past few months, AMC had used stock sales to raise fresh capital. Without these additional shares, Aron said, the company could not have avoided bankruptcy.
AMC has weathered the coronavirus pandemic through fundraising campaigns that have allowed it to continue operations, albeit with limited capacity. Vaccination efforts, relaxed Covid restrictions and new movie releases are now helping to push back customers.
– CNBC’s Sarah Whitten contributed to this coverage.