Shares in Lionsgate extended their losses Wednesday after an activist investor expressed restlessness with the company’s stance on AI.

On above-average trading volume, the stock ended the day at $11.73, down 1% to its lowest level since April. It fell 4% on Tuesday when news of the activist’s agenda first surfaced. The stock is up 28% in 2026 to date, though it has shed 13% of its value over the past month.

While the use of AI in the filmmaking process remains a delicate topic in Hollywood, Wall Street has a more straightforwardly Darwinian view. Anson Funds, which has been one of the five largest independent shareholders in Lionsgate since 2024, believes the company needs to take a more aggressive stance at the risk of becoming obsolete.

“The rise of generative AI has led the market to sort companies bluntly into ‘AI winners’ and ‘AI losers,'” the investment firm wrote to Lionsgate’s board in July. Negative stock movement in the wake of the release of new AI video models like Sora and Seedance, it asserted, “reflects a default market assumption that a studio is more likely to be an AI casualty than an AI beneficiary.”

The letter’s contents were confirmed to Deadline by multiple people with knowledge of Anson’s overture. The board approach was first reported by Semafor.

In an apparent response to the letter, Lionsgate on Wednesday updated a slide deck of the company’s “core tenets.” A company spokesperson did not respond to Deadline’s request for comment.

Lionsgate, compared with many of its peers in the film and TV business, has been fairly active on the AI front. The company recently renewed an agreement with Runway, which it joined forces with in 2024 with an eye toward expenses. Vice Chairman Michael Burns, appearing at a media industry conference in June, said AI would save the company “tens and tens of millions of dollars a year” in production costs.

Earlier this year, Lionsgate also hired former YouTube exec Kathleen Grace as its first Chief AI Officer.

Anson Funds says the company needs to go far beyond those initiatives. One source familiar with the firm’s letter to the Lionsgate board said it argued that AI filmmaking tools are essentially becoming commodities with professional benefits akin to those resulting from a corporate worker asking ChatGPT to proofread a memo. As AI becomes more ubiquitous, the onus is on Lionsgate to articulate a more specific strategy, the firm contends.

Since finalizing a split from Starz last year, Lionsgate has been seen as a desirable acquisition target. European players Banijay and Mediawan were reportedly taking a closer look. After methodically growing its business over nearly three decades and doing periodic tuck-in acquisitions, Lionsgate has assembled 20,000 film and TV titles in its library, which topped $1 billion in revenue in the most recent fiscal year. Its stable also includes notable franchises like Power, Hunger Games, John Wick and Saw.

Lionsgate’s quarterly earnings report last week was highlighted by the success of Michael, the company’s first billion-dollar grossing film, as well as ancillary proceeds from The Housemaid, a holiday season blockbuster.

Asked by analysts during a conference call about strategic possibilities including being acquired, execs said they have not held “substantive discussions.” But execs have spoken informally to banks about their options, though the company hasn’t formally retained a banker, generally a key early step in an M&A process.

The timing would be good for Lionsgate if it chooses to entertain offers, Anson maintained in the letter.

“Amazon’s acquisition of MGM, Microsoft’s acquisition of Activision Blizzard, and the recent, hard-fought contest between Netflix and Ellison-backed Paramount Skydance for Warner Bros. Discovery all demonstrate that technology and streaming players are already willing to acquire premium IP rather than simply license it,” the firm wrote.

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