AMC Entertainment Holdings Inc. (NYSE: AMC) CEO Adam Aron said that the move theatre chain’s equity sale on Thursday strengthens the company, but his comments have failed to convince AMC’s newfound backers — the retail investors.
What Happened: Aron said on Twitter that AMC Entertainment raised $587 million of new equity on Thursday through the equity sale. He added that $1.246 billion of equity raised by AMC in May and June “strengthens” the company.
See Also: How to Buy AMC Stock
However, several of the company’s newer — retail investors who call themselves “apes” — expressed their disappointment with the company’s stock sale on Thursday. One investor pleaded for “no more dilution”, while another shareholder advised Aron to “never forget” the company’s shareholders.
A third shareholder even called Aron “a wolf in apes clothing.”
See Also: AMC Playing The ‘Game’ Lot Better Than GameStop, Says NYU Professor Aswath Damodaran
Why It Matters: The shareholders’ comments show that Aron’s tweets have failed to inspire confidence in them.
Aron had joined Twitter last month to better connect with Apes. The CEO said he has started following Apes on Twitter to get a “first-hand sense” of what AMC’s retail investors are saying.
These investors have driven up the stock price of heavily shorted stocks like AMC Entertainment and GameStop Corp. (NYSE: GME) this year.
AMC disclosed earlier this week that retail investors accounted for 80% of the ownership in the movie theater chain’s stock.
AMC’s shareholders are against the company’s plan to issue more stock, but in addition to Thursday’s stock sale, the company said it will ask shareholders for the authority to increase its authorized share capital by 25 million shares, effective in 2022.
Price Action: AMC Entertainment shares closed 17.9% lower in Thursday’s regular trading session at $51.34 and further fell 7.5% in the after-hours session to $47.50.
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