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AMC Entertainment, a company that nearly went bankrupt less than a year ago, has spent $27.9 million on the troubled gold and silver mining company Hycroft, despite having no experience in the excavation of rare metals.
The post AMC Entertainment Buys Stake in Literal Gold Mine One Year After Bankruptcy appeared first on Consequence.
The Hycroft Mining Holding Corp. owns the 71,000-acre Hycroft Mine in northern Nevada, which is thought to have “15 million ounces of gold deposits and 600 million ounces of silver deposits.”
AMC Entertainment has purchased a 22 percent stake in the company, and chairman and CEO Adam Aron is positively ecstatic about the decision.
To state the obvious, one would not normally consider gold or silver mining to be a core competency of a movie theatre company. The lack of experience at the company would not be an impediment to the move.
In terms of stock prices, AMC’s own shares have fallen by half this year and are now worth roughly half of what they were in 2017. Even before the pandemic, the theatre chain was facing challenges, and while it benefited from Reddit meme stock status in 2021, even novelty investors are concerned about a box office that is still struggling under the burden of COVID-19.
The global box office in 2021 will be roughly half of what it was in 2019. While The Batman is performing well, especially by recent standards, it is too early to predict whether 2022 will be significantly better than the previous year.
The success of Spider-Man: No Way Home and The Batman, as well as the industry’s promising box office in 2022, strengthen AMC Entertainment’s belief that we are on the mend. “Glide path to recovery” is a lovely phrase. And all this talk about easy money is especially comforting coming from the mouth of a man who recently purchased a large stake in a gold and silver mine despite having no idea how to run it.
This is AMC’s latest innovation, and it, like other recent changes, has received mixed reactions. AMC confirmed earlier this month that it would charge more for tickets to The Batman than for other films.