AMC Entertainment Holdings (NYSE:AMC) no longer has a controlling shareholder. As of March 3, Chinese conglomerate Dailin Wanda Group reduced its stake in the theater operator from almost 38% of outstanding shares (giving it 64.5% of the voting power) to under 10%.

That means AMC will be run just like other publicly traded companies that have a number of shareholder owners. The theater owner's stock was up about 10% in premarket trading Monday.

Movie clapperboard on top of cash

Image source: Getty Images.

AMC CEO Adam Aron told analysts on the theater operator's fourth-quarter earnings call last Wednesday that Wanda had converted its Class B common stock into Class A common stock.

While its new 9.8% ownership interest in AMC still makes Wanda the largest shareholder, the conversion means it no longer has sway over business decisions. 

As Aron detailed during the call, the Class B shares had a super voting feature that gave Wanda three votes for every share owned, but only so long as Wanda continued to own 30% or more of AMC's outstanding shares. 

In attempting to raise cash to remain afloat during the COVID-19 pandemic, AMC conducted several at-the-market equity offerings, which is where an agent sells stock on behalf of the issuer at prevailing prices directly into the market. The offerings served to dramatically dilute Wanda's controlling interest far below the 30% threshold. That was when Wanda began converting its Class B shares into Class A stock, which carry a single vote per share.

Aron noted, "With no controlling shareholder in place, now, AMC will be governed, just as most other publicly traded companies, with a wide array of shareholders."

Wanda, however, still has two seats on AMC Entertainment's board of directors.

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