AMC Entertainment Backtracks on Massive 500 Million Share Dilution Plan
AMC Entertainment Holdings (NYSE: AMC) isn't going to dilute investors after all. The movie theater operator has reportedly scrapped its plans to flood the market with 500 million new shares. Instead, it will sell just 43 million new shares.
Chairman and CEO Adam Aron had told CNBC's Jim Cramer last week that by doubling the theater's share count the company would be able to pad its bank accounts at a time when the stock was still trading at elevated levels. The massive dilution that would result from the influx of stock was the unfortunate, but necessary, collateral damage of giving AMC a stable financial foundation.
Analysts and shareholders were not pleased with the plan, though, and the theater chain's board of directors subsequently squelched the idea, though it also said it reserved the right to revisit it in the future.
Source Fool.com
