AMC Entertainment has decided to purchase a significant stake in Hycroft Mining on Tuesday. This is the unusual expansion for the movie theatre firm, a one-time meme stock whose value has decreased after surging last summer. The cinema chain will spend $27.9 million in cash for the deal, receiving roughly 23.4 million shares, Hycroft Mining Holding Corp., and an equal amount of stock warrants.
This deal would make the cinema chain 22% of Hycroft. The shares of Hycroft rose more than 30% Tuesday morning after it more than doubled at one point in premarket trading. The cinema chain shares dropped 50% this year rose 3.6%. The company’s shares reached above $60 a pop during the height of its meme-stock frenzy last June and July.
The company sacked more than half its workers at its mine in western Nevada, ceasing mining operations there. The company said it would concentrate on processing gold and silver sulfide ore. Investor Luis Chang and Everbright Development Overseas Limited raised the company’s shares and spread false press releases about a possible tender offer for the mining company. Chang and the investment company then sold their shares into the market inflated by their scheme.