Adam Aron Urges Retail to Vote ‘Yes’ for Dilution
AMC Entertainment Holdings Inc. (NYSE:AMC) CEO Adam Aron is urging shareholders to vote ‘yes’ on the proposals during the next shareholder meeting, one being dilution.
“A link to the proxy filed with the SEC on our March 14 shareholder meeting. AMC’s Board & I strongly believe the proposals are crucial for AMC’s future. We unanimously recommend that you #VoteYesAMC. They are in the best interest of AMC & our shareholders,” said Adam Aron on Twitter.
The first proposal would dilute the stock by increasing the number of shares from 524,173,073 to 550,000,000.
Many shareholders are on board with doing what the company says is necessary to move forward in 2023.
Diluting the stock could help AMC Entertainment raise more cash for example.
Other shareholders want to know from the CEO how the company plans to utilize this capital, though only very little is known; debt has been AMC’s primary focus to tackle.
AMC Shareholder Meeting Proposals
Below are the three proposals being presented for AMC’s shareholder meeting.
Proposal 1
Proposal No. 1: To approve an amendment to our Third Amended and Restated Certificate of Incorporation (our “Certificate of Incorporation”) to increase the total number of authorized shares of Common Stock from 524,173,073 shares of Common Stock to 550,000,000 shares of Common Stock (the “Share Increase Proposal”);
This proposal will dilute AMC Entertainment stock, but it’s essential for the company’s growth whether shareholders like it or not.
Voting ‘no’ on proposal 1 could stunt the company’s capabilities to raise cash short-term.
Voting ‘yes’ will allow the company to raise capital to stay afloat, though it means AMC’s share price may plummet as a result.
This is why the second proposal will offset the share price without affecting the value of shareholder’s portfolios.
Proposal 2
Proposal No. 2: To approve an amendment to our Certificate of Incorporation to effectuate a reverse stock split at a ratio of one share of Common Stock for every ten shares of Common Stock, which together with the Share Increase Proposal, shall permit the full conversion of all outstanding shares of Series A Preferred Stock into shares of Common Stock (the “Reverse Split Proposal” and collectively with the Authorized Share Increase Proposal, the “Charter Amendment Proposals”);
A 1-for-10 reverse stock split will decrease the number of shares investors hold while raising AMC’s share price by 10x.
Shareholder who own 10 shares of AMC will own 1 share of AMC priced at $50 instead of owning 10 shares priced at $5 per share.
The value won’t change, but the number of shares and share price will.
A higher share price buys AMC Entertainment time.
Proposal 3
Proposal No. 3: To approve one or more adjournments of the Special Meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the Special Meeting to approve and adopt the Charter Amendment Proposals (the “Adjournment Proposal”).
This gives AMC the right to approve these proposals should there not be sufficient votes.
Related: Adam Aron Says AMC Critics Are Fundamentally Wrong
APE Conversion to AMC Stock
For APE share to convert into AMC stock, shareholders will need to vote ‘yes’ on both the first and second proposals.
Here’s a statement from the company’s filing:
“In order to effect the conversion of APEs into Common Stock, stockholders must approve BOTH the Share Increase Proposal and the Reverse Split Proposal. The Share Increase Proposal alone will not create sufficient authorized Common Stock, without the Reverse Split Proposal, to enable the conversion to occur. Nor will the Reverse Split Proposal alone satisfy the terms of the Series A Preferred Stock to enable the conversion to occur.“
AMC shareholders will be receiving a proxy link from their brokers where they will be able to cast their votes on all three proposals.
What are your thoughts on these proposals?
Leave a comment down below.
Source: Proxy statement.
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Show CommentsHi all beware Im with fidelity as my 3 grandsons and 2 daughters. To day we received Proxy vote apps. All of us had to call because we all had incorrect numbers of shares and missing 1 or 2 apps you need 1 each for APE and AMC shares Times your number of account. EX 2 accounts 4 APPS.
HI BM YOU really have no idea what is going down so keep looking dumb because I don’t know anyone who will give up 90 % of their shares after 2 years to help the crooks to make another dollar. Vote no . AA needs to run a business not steal our money. I will be glad to pay for legals to tear apart the market practices that are in now. AA do your job stop selling you stock and help the people that saved your AMC.
EVERYONE NEEDS TO VOTE…it doesn’t work if we all don’t stand up and say no to an ungrateful CEO. We got him were he is today…a billionaire twice over. I agree with the others who say” he’s in it for himself only.
I’m holding along with voting NO!
These are all very amusing “vote No” comments. what fool would openly admit that they poured their life savings in on a gamble. Especially the one who claims to be 65. These Bots and paid commenters are out of control.
If you have been in the play as long as I have, trust the process. wait it out. It costs us nothing and them everything.
I’ve seen a lot of people say they poured everything. These comments are real people expressing their real opinions and feelings. I think it’s proper to validate and respect that, even if we don’t agree.
What fool would not vote no after 2 years of H/Fs controlling the price of AMC stock with borrowed shares , ghost shares, borrowed shares they don’t even own or pay for. You are in the wrong place buddy. We retails saved AMC and are here to destroy the people who for the last 20 years put companies and workers out of business . They stole our money and paid off all the crooks that run our country. You trust the process you are a loser and we are trying to save a free market that is being destroyed. I have more that I want to share with you but not verbally if you know what I mean !!!
Joe Michaels
I agree with the replies above. I will vote NO ! I have my whole life’s savings into this stock at $55.00 per share. I have lost hundreds of thousands of dollars. I am 65 and need my money. Several other companies have done this reverse stock split and i have lost every time. This is just another case of the small retail investor being preyed upon by the greed of the elites.
I’m voting no. I’m like a lot of retail who got in when the stock was really high. I’m so in the red that I can only laugh. I’ve been investing for a few years and I bought into companies that eventually did reverse splits. Historically they don’t work. It gives the illusion of the price being higher. The problem is retail has exhausted most of their funds to buy AMC the last couple of years. Who’s going to buy at $50 a share? We’ve already seen the manipulation. If this rs happens they will short it back down to $5. Then what? Dilute more? You can only do that so many times. This will be a penny stock when it’s all said and done.
To the shareholders who want to vote “Yes”: yes, the share price will go up, but what guarantees do we have that short hedgies won’t bash the stock to dive the price down?
My life savings has been saving AMC for 2 years as well as my 3 grandsons and daughters IRAs . I have to vote NO we need a squeeze we can’t delute our selfs any more . If Aron was sincere he should be suing the sec all the way up to Yellen who has received millions to turn there heads . We raise the stock price to 50.00 and Citadel and H/Fs short it down too 4.00 again illegally and we all loose. Please AA go to the crooks sue don’t let them control our destiny another day or are you working for them?
I will absolutely vote No. What Adam Aron doesn’t care to understand is that thousands of investors who who bought last year or 18 months ago at $55 per share. I have 2000 shares that I bought at $55 per share and have been holding my stock for 18 months while the price of shares have plummeted. If this 1 to 10 reverse split goes through, I’ll have 200 shares at $55 per share. What have I gained. You Mr. Aron will gain immensely. The stock would have to rise to $550 per share for me to break even. Mr. Aron, your a pig. Sue the SEC instead of a reverse split.
Will you vote ‘yes’ on AMC’s newest proposals? Leave your thoughts below.
I’m not interested in helping AA , I didn’t get into this to make AMC better . Maybe I’m wrong but when this move is over I’m done with investing!!! They have been able to jerk us around for two years
That is disrespectful to retail investors, they are not thinking about those who saved the company, with that reverse division, all of us who have been here for a long time are going to lose thousands of dollars, I say no to that vote, let it be dedicate AA to suing those he knows and pretends to be the one he doesn’t know, HE IS BEING UNGRATEFUL AND THINKING ONLY OF HIM.