I need other eyes to look at this, and let me know if I am interpreting the following correctly. My interpretation has me pissed off. It looks like Aron might be trying to use investments from Meme's, who follow him/AMC, to booster his profit margins. Makes me question whether he is investing in penny stock gold mine, which has gone no where, solely because he might believe that memes will follow him into the stock with cash, boosting the share price (like what is happening now), and he will make money off THAT, not necessarily expecting gold mining to be successful for the company. All he would have to do now is to sell the increased value shares and he has made a bunch of money. Am I being too cynical? Look at the reply comment Aron made about memes.
I will freely admit that there can be different interpretations of items that are written, or spoken.
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Hycroft Mining stock’s ‘memester’-induced rocket ride is making AMC a lot of money
Tomi Kilgore – Yesterday 4:59 AM
Shares of Hycroft Mining Holding Corp. rallied in very active trading Tuesday, as the gold and silver miner enjoyed its new meme-like status, with help from new investor AMC Entertainment Holdings Inc.
© Hycroft Mining Holding Corp.Hycroft Mining stock’s ‘memester’-induced rocket ride is making AMC a lot of money
The stock shot up as much as 33.6% intraday before paring gains to close up 11.6% at $2.59, an eight-month high. Trading volume swelled to a record 386.2 million shares, enough to make the stock the most actively traded on major U.S. exchanges.
That follows an 81.3% blast off on Monday on previous-record volume of 385.3 million shares, after AMC Chief Executive Adam Aron appeared on CNBC to explain the decision to invest in the company.
The movie theater operator and metals investor Eric Sprott had announced before the March 15 open that they were each making a $27.9 million investment in Hycroft, in a move that stunned many on Wall Street given that the Hycroft operated in a business that was well outside AMC’s core competency. Read more about AMC’s investment in Hycroft.
Aron explained that one of things AMC wanted to do with the $1.8 billion war chest it accumulated by cashing in on the meme-stock frenzy that had boosted its stock price was to find “transformational” acquisition opportunities. In Hycroft, Aron said, AMC found a company with great assets in the ground (gold and silver) that was suffering from a cash squeeze, just like AMC was before it was saved by its shareholders.
“We knew we were going to take some flak when we did it,” Aron said on CNBC’s “Squawk on the Street” segment. “There was one thing we were certain of — we were going to make a lot of money.”
That they did, as the value of the 46.82 million shares of Hycroft that AMC owned has increased by $61.3 million in two days. That’s more well more than double AMC’s initial investment of $27.9 million.
CNBC’s David Faber then asked Aron, if AMC’s new core competency was “to use the memesters that you have to help turn around the fortunes of a company because they’re willing to put money behind it,” and Aron answered:
“I think I have to say the answer to your question is, ‘yes.'”
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MY COMMENT: In Aron's answer, he appears to state that he believes that meme's will 'follow him', in helping to put money into the mining company, which will then generate profits for AMC. In other words, he appears to be 'using' the memes to his benefit. How is this any different than what the hedge funds are doing?
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Hycroft Mining followed by tweeting late Monday, that it certainly liked the attention it was getting, and Aron’s comments.
Prior to AMC’s investment, Hycroft was a so-called “penny stock,” as it had closed below the $1 mark every day since Nov. 15, 2021. It had closed at its record low of 29 cents as recently as March 3. The company has been warning since March 2019 that its auditors have expressed “substantial doubt” about its ability to continue as a going concern.
What may have helped make the penny stock of such a troubled company, on top of AMC’s investment, was that short interest, or bearish bets in the stock had spiked up 3,214% during the first half of March, to a record 11.02 million shares as of March 15 from 332,661 shares at the end of February. Read more about the mechanics of short selling.
That boosted short interest as a percent of the public float of shares to 23.5%, which compared with fellow meme stocks AMC of 20.3% and GameStop Corp. of 19.6%.
Hycroft’s stock has climbed 735.2% month to date, while fellow meme-stocks AMC has rallied 56.1% and GameStop has run up 45.9%. Meanwhile, the S&P 500 index has gained 5.9% so far in March.
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