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AMC Theatres is backing away from its plan to authorize 500 million new shares of the company’s stock.
AMC had sought shareholder approval for the plan, which would have nearly doubled the total number of shares on the market if all 500 million were issued.
In an SEC filing Tuesday, the company said that “upon review and careful consideration with further discussions with management and its advisors,” it was withdrawing the proposal.
Instead, the company announced an “at-the-market” offering that would see the company sell up to 43 million shares, with Goldman Sachs & Co. LLC, B. Riley Securities, Inc. and Citigroup serving as the sales agents.
AMC CEO Adam Aron has said in interviews over the past month that while the company had no plans to actually sell all 500 million shares if approved, it would have used them to help with acquisitions and negotiations with landlords as needed, in addition to addressing liquidity needs. The at-the-market offering, while scaled down from that initial plan, would still bolster the company’s bottom line.
Meanwhile, the company continues to face headwinds from the pandemic. In a separate SEC filing, the company disclosed that it expects revenue for the first three months of 2021 to be $148 million, down from $941 million a year earlier. It expects its net loss to be in the ballpark of $570 million.
AMC has survived the pandemic both by issuing new stock and through debt offerings. However, traders on social platforms like Reddit helped boost the company’s share price earlier this year.
That sudden spike in share prices caused the private equity firm Silver Lake to convert its debt to stock, wiping out $600 million in AMC’s debt. Silver Like subsequently liquidated its stock for a nine-figure profit. Likewise, China’s Wanda Group, which had been a controlling shareholder in AMC, converted its stock and sold off much of it.
The company’s stock continues to perform well. After opening the year at $2 per share, it closed the day above $11 per share. At Tuesday’s closing price, those 43 million shares would net the company more than $400 million.
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