Cinedigm CEO Chris McGurk announces buyback of up to 10 million shares of company’s distressed stock and also introduces a name change to coincide with a “major” shift from cinema technology to streaming

Cinedigm CEO Chris McGurk said the company plans to buy back up to 10 million shares of its ailing stock over the next 12 months to avoid being delisted from the Nasdaq.

In a letter to shareholders, the former Universal, Disney and MGM executive, who has held the top job at Cinedigm since 2011, also said the company plans to rebrand itself in the coming months. After a recent yearlong effort to shift its strategic focus from film technology to streaming, the company sees the rebrand as a tool to “represent this important turning point” and “highlight our position and history,” McGurk wrote.

Cinedigm shares rose 5% on almost three times their average trading volume to close at 52.5 cents. That’s about halfway through last year’s stock range, but also well below the $1 threshold set by Nasdaq for all publicly traded companies. Shares hit a recent high of around $2.50 in September 2021. Last fall, the company entered into a 180-day “cure agreement” with Nasdaq after it was warned of a possible delisting. Delisting is a major blow to a publicly traded company, cutting it off from key sources of funding and damaging its reputation.

Nasdaq’s renewals end on April 3, although it is common for companies to receive multiple renewals. “I believe there is potential to further extend our healing period,” McGurk wrote. He added that Cinedigm shares, like others in the media and technology space, have recently been hit hard by “macroeconomic and geopolitical factors”.

Stock buybacks are generally viewed as positive by Wall Street, although enthusiasm is not guaranteed in all corners. In one famous example, near the end of Philippe Dauman’s tenure as CEO of Viacom as CEO, the executive reached out to majority shareholder National Amusements, in part by seeking a $15 billion buyback while the shares were outstanding. The criticism was that money could be better spent on mergers and acquisitions or digital investments.

“I personally own over two million shares of Cinedigm,” McGurk explained in his letter, “so I understand the frustration that all of our shareholders are feeling right now.” On the M&A side, he referred to the recent purchase of the Faith and Family Media Dove.org and Christian Cinema from the Giving Company, the company’s eighth acquisition in the past two years.

Cinedigm’s board recently re-elected two board members who are peers of McGurk: Peter C. Brown, former CEO of AMC Entertainment, and Ashok Amritraj, CEO of Hyde Park Entertainment. The company, which has a library of 60,000 film and TV titles and powers streaming channels such as Cineverse, Fandor and Screambox, last month reported third-quarter revenue of $27.9 million, up 98% from the same period last year.