Shares of AMC Entertainment (AMC 0.93%) were falling 4% in midday trading Thursday after the theater operator published a proxy statement reminding investors it wants to further dilute shareholders.
AMC has used the support it's received from the r/WallStreetBets crowd to massively dilute its shareholders by issuing tens of millions of new shares to raise money. While the stock had been on life support due to the pandemic causing states to order its theaters closed for most of last year, the tremendous run-up in its stock's value -- up 2,650% so far in 2021 -- has allowed it to raise billions of dollars.
CEO Adam Aron tweeted that the dilution has served to strengthen its finances:
Some of you fear dilution, but may be neglecting that equity raising is a powerful tool to strengthen a company and help shareholders. AMC said 5 times in Jan, May and June 2021 that we diluted shares, but as a result raised $2.5 billion. AMC is so much stronger because we did.— Adam Aron (@CEOAdam) June 24, 2021
Aron also tweeted he and the board of directors are looking for shareholder support to issue an additional 25 million shares. And perhaps to minimize the impact the dilution would cause, he also noted the shares can't be issued till next January, some six months from now.
The plan, though, doesn't seem to be sitting well with many investors, which could be why Aron saw the need to ask for support via social media.