- AMC climbed as much as 9% on Thursday after its CEO said the company won’t sell any of the 500 million shares its seeking to authorize.
- Adam Aron said if the company needs to raise short-term cash it still has some shares left from a prior authorization.
- AMC, which has been a popular meme stock, is now up more than 365% in 2021.
- See more stories on Insider’s business page.
AMC Entertainment shares climbed as much as 9% on Thursday after CEO Adam Aron said it will not sell in 2021 any of the 500 million shares it’s asked investors to authorize.
The company’s shareholders will vote on May 4 on whether to approve AMC’s request to increase its number of shares outstanding, which Aron plans to deploy in the coming years.
“We hereby pledge at AMC that if the shareholders approve this authorization for 500 million new shares to be issued, we will not use one of those 500 million shares in calendar year 2021. Not one,” CEO Adam Aron said in an interview published Wednesday on a YouTube program called Trey’s Trades, hosted by an independent investor.
AMC included Aron’s comments in a Thursday filing with the Securities and Exchange Commission. The company has roughly 450 million shares outstanding, according to Bloomberg.
The movie-theater operator has been working to recover from the hit the business took from the COVID-19 pandemic. The chain recently started to reopen its theaters after they closed to help reduce the spread of the respiratory disease.
Aron said in the YouTube interview that AMC still has about 43 million shares outstanding that were authorized in 2013. The company could use those shares to raise cash in the short-term if needed but that no decisions have yet been made on that matter, he said.
Asking for authorization to issue 500 million shares is part of the company’s preparation for operations on a longer-term basis, Aron said.
“If you give us the flexibility to use those shares when it makes sense for you, the shareholder, that’s when we’ll use them and not before,” said Aron.
AMC stock has surged from about $2 at the start of this year in part during major short-squeeze rallies that were fueled by retail investors active on Reddit’s Wall Street Bets forum. Shares are up more than 365% year-to-date.