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Latest Reddit trader army win: AMC pulls plug on stock sale proposal

06 July 2021
Dan Ackermann

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,
we’re cancelling the July vote on more shares. And no more such requests in 2021. 1 of 2 pic.twitter.com/yNLhBAU5y1

— Adam Aron (@CEOAdam) July 6, 2021

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.
  • "There have been some really fantastic things that have happened ... given the excitement from retail investors. But then the reality is some of the more mundane aspects of investing, like voting in shareholder meetings, are a little bit anathema" to this group.

What to watch: AMC has had to confront the new face of shareholders: an army of retail investors that coalesce on social media platforms.

  • CEO Adam Aron said that the company would offer an early screening of "Escape Room" for AMC "Apes" — how company investors deem themselves on Reddit.

Go deeper: How AMC is different

Transcripts show George Floyd told police "I can't breathe" over 20 times

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Newly released transcripts of bodycam footage from the Minneapolis Police Department show that George Floyd told officers he could not breathe more than 20 times in the moments leading up to his death.

Why it matters: Floyd's killing sparked a national wave of Black Lives Matter protests and an ongoing reckoning over systemic racism in the United States. The transcripts "offer one the most thorough and dramatic accounts" before Floyd's death, The New York Times writes.

The state of play: The transcripts were released as former officer Thomas Lane seeks to have the charges that he aided in Floyd's death thrown out in court, per the Times. He is one of four officers who have been charged.

  • The filings also include a 60-page transcript of an interview with Lane. He said he "felt maybe that something was going on" when asked if he believed that Floyd was having a medical emergency at the time.

What the transcripts say:

  • Floyd told the officers he was claustrophobic as they tried to get him into the squad car.
  • The transcripts also show Floyd saying, "Momma, I love you. Tell my kids I love them. I'm dead."
  • Former officer Derek Chauvin, who had his knee on Floyd's neck for over eight minutes, told Floyd, "Then stop talking, stop yelling, it takes a heck of a lot of oxygen to talk."

Read the transcripts via DocumentCloud.