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".
It’s no secret I think 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. So,— Adam Aron (@CEOAdam) July 6, 2021
we’re cancelling the July vote on more shares. And no more such requests in 2021. 1 of 2 pic.twitter.com/yNLhBAU5y1
Of course, voting on the other 4 issues requiring approval at the July 29 annual AMC shareholder meeting will continue on schedule. But proposal 1 is hereby officially tabled. There will be no voting before 2022 on more shares. 2 of 2 pic.twitter.com/1fBya4sjJc— Adam Aron (@CEOAdam) July 6, 2021
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.
Many of you have suggested we show live pro sports, Esports and events. We are on it. On Saturday July 10, live from Las Vegas, the Poirier McGregor UFC matchup will be on AMC’s big screens at 95 U.S. AMC Theatres. Tickets only $25 vs. $70 on pay-per-view! https://t.co/RDn2TVfZ9E pic.twitter.com/l90bGpqHqZ— Adam Aron (@CEOAdam) July 5, 2021
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.