AMC CEO Appeals To Shareholders To Approve Plan For Issuing 25M Shares: 'Arm Us With The Tool...To Go Find Value-Creating Opportunities'

AMC Entertainment Holdings Inc. AMC CEO Adam Aron is seeking support from the company’s shareholders to increase the authorized share capital by 25 million shares, saying that the proposed stock issuance is in the "best interest" of the movie theatre chain’s future.

What Happened: In an interview on Thursday with Trey Collins, the owner of Trey’s Trades channel on YouTube, Aron tried to convince AMC’s shareholders to allow the company to issue more stock.

“If you arm us with the tool — meaning stock as the tool — to go find value-creating opportunities for AMC shareholders, we can do that. If we are not armed with this tool, then you’re tying our hands behind our back and you’ll make it just that much harder for us to land some of these attractive opportunities that could benefit us all,” Aron said.

See also: How to Buy AMC Stock

Aron also defended AMC’s recent 8.5 million share sale to hedge fund Mudrick Capital and the announcement of the sale of an additional 11.55 million shares in an at-the-market (ATM) equity program on Thursday. He noted that the 20 million shares were initially intended to be given to AMC’s management team, but it was decided to sell the stock to “strengthen” the company.

“Between those two transactions we raised over $800 million of cash, not to line my pocket or anybody who works at AMC, but to put that money in the treasury of AMC to strengthen AMC and let AMC do more good things, to grow the company,” the CEO said.

See Also: AMC Playing The 'Game' Lot Better Than GameStop, Says NYU Professor Aswath Damodaran

Why It Matters: AMC’s shareholders are against the company’s plan to issue more stock, but the company said it will ask shareholders for the authority to increase its authorized share capital by 25 million shares. If approved, the company would not be able to sell those shares until 2022.

In April, AMC abandoned a proposal to issue 500 million new shares after it failed to win support from shareholders.

AMC has postponed its shareholder meeting to late July from May to enable its newer shareholders — retail investors who call themselves “apes”— to attend the meeting.

Price Action: AMC Entertainment shares closed 17.9% lower in Thursday’s regular trading session at $51.34 and further fell almost 7.5% in the after-hours session to $47.50.

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Photo by Eden, Janine and Jimon on Flickr