AMC Entertainment Holdings (NYSE:AMC) Inc shares have tumbled more than 15% after shareholders approved measures that the movie theatre operator says will help it raise cash and reduce debt.
Investors voted at a special meeting on Tuesday to increase the company’s shares outstanding and implement a 1-for-10 reverse stock split.
The two moves will allow the company to convert its recently issued preferred shares, known by their trading symbol 'APE,' into common stock.
"The surest way to combat naysayers and profits of doom is to keep our cash reserves robust, manage our balance sheet smartly, and operate our company as well as we know how," AMC CEO Adam Aron said after the vote.
The approved measures cannot yet be implemented pending litigation in Delaware, where a lawsuit alleges that AMC circumvented shareholders who were against adding more shares with the issuance of its APE shares. A hearing on the matter is scheduled for April 27, 2023.
“As previously disclosed, we will vigorously oppose claims,” Aron said. “We will keep you updated as we have more information.”
AMC stock fell 16.4% to US$4.56 on Tuesday afternoon, while its APE shares shed 3.7% at US$1.67.
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