Gallery Shareholders Reject Upping Shares12 Jun, 2007 By: Erik Gruenwedel
Shareholders of No. 3 movie rental company Movie Gallery Inc. have rejected a proposal to amend the company's certificate of incorporation in order to increase the number of authorized shares of common stock and preferred stock.
The proposal, which was voted down June 7 at Dothan, Ala.-based Gallery's annual shareholder meeting, would have granted Gallery's board of directors authorization to increase the number of common and preferred shares for sale to investors.
Financially challenged companies often seek additional stock sales as a means to generate capital while shareholders believe the additional shares would dilute the value of existing shares.
In addition, shareholders approved re-elections to the board of directors. The president and CEO Joe Malugen, vice chairman and SVP H. Harrison Parrish, and directors John Jump, James Lockwood and William Snow were approved.
Movie Gallery posted losses of $14.9 million in the last quarter on revenue of $648 million, a decrease of nearly 7% from $694 million during the same period last year.