BigBear.ai Shares Tumble 8% Ahead Of Crucial Shareholder Vote Deadline On Increasing Authorized Shares
Synopsis
The company wants its investors to approve an amendment for increasing its authorized common shares from 500 million to 1 billion shares.
- BigBear.ai’s CEO Kevin McAleenan has told company shareholders that the firm is running low on available shares.
- Proxy shareholder firms ISS and Glass Lewis have both recommended voting in favour of the proposal.
- Company’s CFO Sean Ricker said earlier this month that the company was “97% of the way” to reaching the required votes.
Shares of Bigbear.ai were under investors’ radar and the top trending stock on Stocktwits ahead of its shareholder vote deadline on the company's proposal to increase its authorized common stock.
The company wants its investors to approve an amendment for increasing its authorized common shares from 500 million to 1 billion shares. The shareholder vote deadline is till 11:59 PM ET on Wednesday. The approval will be decided at a reconvened special meeting on Thursday.
BigBear.ai’s proposal to increase the authorized shares had failed to secure enough votes last month.
Why It Matters
Authorized shares put a legal maximum limit of shares a company can issue. Increasing the limit of authorized shares helps a company make finance acquisitions and compensate its employees with stock.
BigBear.ai’s CEO Kevin McAleenan has told company shareholders that the firm is running low on available shares and has urged shareholders to vote in favour of the amendment. He said that approval “would not result in the immediate issuance of new shares.”
Proxy shareholder firms ISS and Glass Lewis have both recommended voting in favour of the proposal, he said in a letter to shareholders. “Having access to available authorized shares has allowed us over the years to make important acquisitions, fund product development and strengthen our balance sheet,” he added.
The letter also said that additional shares would be available in the future to help fuel the company's growth as it looks to expand its AI capabilities, invest in its technology and Research and Development, invest in attracting and retaining top talent, and evaluating and acting on opportunistic financing and strategic initiatives.
Company’s CFO Sean Ricker said earlier this month that the company was “97% of the way” to reaching the required votes and added that “very few shares remain” under the current authorization.
How Did Stocktwits Users React?
Retail sentiment around BBAI trended in ‘bullish’ territory amid ‘high’ message volume.
Shares of the company have fallen 2.4% year-to-date.
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