Reddit traders drove AMC's stock to meteoric heights. Now they're one reason why the theater chain tabled its latest plan to cash in on that hype.
What's new: AMC said Tuesday it's putting off a vote that could have let the company sell up to 25 million more shares next year.
- "The strength of the retail investor has been acknowledged and respected," one Reddit user posted in response.
Why it matters: It's how AMC has taken advantage of the absolute mania: issuing shares and using proceeds to shore up the business that's been clobbered by the pandemic.
Where it stands: "[T]hey have raised enough capital and have their debt trimmed to a manageable level," says Michael Pachter, a Wedbush analyst.
- Movie-goers are returning, helping bolster cash — though overall movie attendance remains well below pre-pandemic levels.
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
Catch up quick: Retail investors, which own a whopping 80% of AMC's shares, voiced opposition to the share sale. But it's not clear whether enough of them would have "shown up" to even move the vote forward....
- "It's sort of like you live by the sword, you die by the sword," says Matt Zloto, an analyst at CreditSights.