AMC just acquired the silver and gold mine company Hycroft at a 22% stake.
CEO and President Adam Aron announced on Twitter AMC is playing on offense with a bold diversification move.
The company announced in a press release they will be receiving an additional 23.4 million warrants in Hycroft at $1.07 per share.
The stock is currently trading around $1.70.
What does this AMC news mean for shareholders and the company?
Let’s discuss it.
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About Hycroft Mining Holding Corporation
The 71,000 acre Hycroft Mine in northern Nevada is one of North America’s largest development sites.
Independent third-party studies confirm that the Hycroft Mine has some 15 million ounces of gold deposits and some 600 million ounces of silver deposit.
Making an investment equal to AMC is Eric Sprott, one of the world’s leading gold and silver investors.
Combined, AMC and Mr. Sprott are investing $56 million, which will help Hycroft considerably lengthen its financial runway.
AMC and Mr. Sprott will each invest $27.9 million in cash in Hycroft in exchange for 23,408,240 units, with each unit consisting of one common share of Hycroft and one common share purchase warrant (the “Units”).
The Units are priced at $1.193, which complies with the minimum bid price required by Nasdaq for an at-the-market purchase.
Adam Aron said this investment is a terrific opportunity to potentially strengthen and enrich the company, creating significant value to AMC shareholders.
Why is AMC investing in mining?
AMC is taking their expertise in guiding companies going through time of severe liquidity challenges and bringing Hycroft back to life.
“Our strategic investment being announced today is the result of our having identified a company in an unrelated industry that appears to be just like AMC of a year ago. It, 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 CEO and president, Adam Aron
The company is diversifying its portfolio and creating several streams of income.
Other streams of income aside from acquiring a stake in Hycroft mining company can be seen in NFT royalties, cryptocurrency appreciation, and their Perfectly Popcorn brand coming to retail stores this year.
AMC Entertainment is on a role despite ongoing ‘short and distort‘ campaigns aiming to drive the stock price down.
Even Yahoo News is praising Adam Aron for his move.
I’m curious to know your thoughts.
Leave them in the comment section at the end of the article.
Hycroft short interest skyrcockets
Prior to any talks about AMC acquiring the mining company, Hycroft’s (HYMC) short interest was below 1%.
It has now surged to 20.22% with a utilization score of 100.
I will be updating the short interest daily here.
Ortex is even reporting HYMC to be on the NYSE threshold list.
Short sellers got in on this relatively quick.
In fact, Hycroft’s short interest is almost identical to that of AMC’s.
It’s safe to say the people short selling Hycroft mining stock are the same ones shorting AMC Entertainment.
If you would like me to cover more of HYMC stock leave a comment below letting me know.