All eyes are on AMC Entertainment (NYSE:AMC) and AMC Entertainment Preferred Equity Units (NYSE:APE) following the closing of AMC’s special meeting of stockholders. During the meeting, the preliminary votes showed that shareholders voted in favor of all three proposals. Generally, preliminary votes reflect the final result. Following the meeting, AMC stock was halted thrice but resumed trading. The halt was attributed to reason code M, which is reserved for times of general volatility.
Proposal number one, or the share increase proposal, sought to increase the number of authorized AMC shares to 550 million from 524.17 million. In total, 88% of the votes were cast in favor, while 11.2% of the votes were cast against, according to data from Refinitiv. The votes in favor represented over 67.5% of outstanding shares with voting authority.
Based only on AMC shareholders, 72.5% of the votes were in favor, while 26% were against. The proposal also factored in the votes from APE shareholders. Of these shareholders, 91% of the votes were cast in favor, while 8.3% were cast against.
AMC Stock: Preliminary Results of the Special Meeting
Next is proposal number two: the 1-for-10 reverse split proposal.
The preliminary vote showed that 87.3% of the votes were cast in favor, and 11.9% of the votes were cast against. The votes in favor represented over 65% of outstanding shares with the authority to vote. Based only on AMC shareholder votes, 70.4% of the votes were cast in favor, while 28.2% of the votes were cast against. APE shareholders voted 90.6% for and 8.7% against. Finally, proposal number three, or the adjournment proposal, was also approved, receiving 87.2% of votes in favor.
As AMC previously explained, the conversion of APE into AMC can not be enacted without the approval of both proposals one and two. This is because the share increase approval would not create enough authorized common stock for the conversion without the approval of a reverse split.
AMC shareholders should also consider the status quo order enacted by the Court of Chancery. The order prevents AMC from implementing proposals one and two until a ruling is announced on the plaintiff’s preliminary injunction motion.
“As previously disclosed, we will vigorously oppose claims made in litigation in the Delaware Court of Chancery that we are not following the wishes of our shareholders designing our share structure and authorizations,” said CEO Adam Aron at the meeting.
A hearing for the preliminary injunction motion has been scheduled for April 27.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.