Adam Aron is letting it be known that he knows who butters his popcorn these days. AMC Entertainment AMC, +1.06 percent announced in a Tuesday morning filing that it is abandoning its request for shareholders to approve 25 million new shares as part of a planned capital increase that would have allowed the company to leverage its alpha “meme stock” status while also diluting existing stockholders, the majority of whom are retail investors who have voiced their opposition to the plan.
AMC CEO Adam Aron, who has established a habit of actively engaging with the retail investors who now hold around 80% of the company’s stock, moved to Twitter minutes after the filing to let his followers know that they were the basis for his decision. While Aron still wants the capital from 25 million new shares to pay down AMC’s remaining debt and give him cash reserves to play with as the theatre industry recovers, he is acutely aware of the difference in opinion among AMC’s retail base on social media and “does not want to proceed with such a move,” he tweeted.
And he received the response he desired. After plunging more than 12% in the previous two weeks, AMC stock jumped over 3% on Tuesday morning. When it comes to his desire for retail investor acceptance, Aron has been probably the least subtle meme stock CEO. Aron introduced an effort dubbed “AMC Investor Connect” in June, which offered advantages to individual investors owning AMC stock, including private conversations with Aron and free popcorn at AMC theaters. Ryan Cohen, the newly-installed chairman of the board at GameStop GME, -3.21 percent, has also managed to become a meme stock celebrity, although his interactions with investors have been more oracular than Aron’s, and more reminiscent to Tesla’s TSLA, -2.36 percent Elon Musk’s behavior. The call for shareholders to authorize the 25 million new shares came soon after the launch of “AMC Investor Connect,” but it immediately became clear that no amount of free popcorn would persuade Redditors interested in shorting AMC stock to agree to dilute their own shares. Aron’s celebrations were met with suspicion from the retail crowd, even after the blockbuster opening weekend of Vin Diesel’s “F9” brought in $70 million and appeared to demonstrate that Americans were returning to theaters after COVID destroyed the industry. Some were quick to fire back when Aron tweeted on June 28 that “F9” had propelled AMC to “RECORD NUMBERS since re-opening our theatres.” One person almost quickly answered, “See, you don’t even need 25M shares right now.” “You’re already killing it!!!” says the narrator. AMC’s capitulation was welcomed with joy on Reddit, where investors referred to themselves as “Apes” and spent Tuesday morning praising Aron for giving many of them exactly what they wanted. zv5000 said, “He did it!” “Adam Aron f***ing smashed the one thing that was dividing apes! BABY, KING SILVER IS BACK!!!!!” There are few distinctions more prestigious among Reddit’s retail investors than being dubbed a “silver back.” While the return of the blockbuster machine Marvel Cinematic Universe to screens on Friday in the form of Scarlett Johansson’s “Black Widow” may have weakened Aron’s case for new shares, the AMC CEO isn’t done pushing his case to capitalize on his company’s online popularity by issuing new shares in the future. In a follow-up tweet, he said: Aron urged his shareholders to vote on the four items still on the table for AMC’s July 29 meeting on Tuesday morning, while also sneaking in a sneak preview of his own. Aron tweeted, “There will be no voting on new shares before 2022.”/n
