- AMC shares fell by more than 6% during Thursday’s session after the company reiterated plans to issue 500 million shares.
- The movie-theater chain’s CEO sees an “opportunity” to bolster cash reserves and make other operational moves.
- “We’ll be sensitive to dilution issues,” said AMC CEO Adam Aron on CNBC.
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AMC shares fell Thursday after the movie-theater chain’s chief spoke about the company’s plan to issue 500 million shares.
AMC in a March regulatory filing said it wanted to increase the number of shares to total more than 1.02 billion and for shareholders to vote on the matter on May 4.
“We’ll be sensitive to dilution issues, but at the same time there’s an opportunity to bolster our cash reserves and there’s an opportunity to buy back debt at a discount or pay deferred theater rents,” AMC CEO Adam Aron said on CNBC’s “Squawk on the Street” program. “There are a lot of good reasons for shareholders to give us the authority.”
The company is already seeing benefits from the vaccination of millions of Americans from COVID-19 as well as from the release of new movies, Aron said.
Shares of AMC fell by as much as 6.3% to $9.56 before trimmed losses to 5%. The shares, which have grown in popularity among investors on Reddit’s Wall Street Bets forum, have leapt from around $2 each at the start of 2021.