Movie theater giant AMC Entertainment AMC announced an interesting move on Tuesday. CEO Adam Aron said the company purchased 22% of Hycroft Mining HYMC, which is a gold and silver miner based in Nevada. AMC will shell out $27.9 million in cash for the deal and receive about 23.4 million shares & stock warrants for HYMC.
The investment surprised many on Wall Street, but Aron dubbed it as “strategic.”
“[Hycroft], too, has rock-solid assets, but for a variety of reasons, it has been facing a severe and immediate liquidity issue. Its share price has been knocked low as a result. We are confident that our involvement can greatly help it to surmount its challenges — to its benefit, and to ours.”
AMC was one of the top traded and searched stocks during last year’s meme stock phenomenon, and since then, it has used its popularity among retail investors to raise billions of liquidity.
Hycroft, however, as a history of financial turmoil. It filed for bankruptcy protection back in 2015 so that it could restructure its debt, and more recently, Hycroft included a “going concern” clause in a quarterly securities filing last November; it said that it would likely need to raise more capital to meet certain financial obligations over the next year.
AMC was up about 2% in morning trading and closed 6.8% higher. HYMC surged as much as 40% earlier today before settling at $1.52 per share, up 9.35%.
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