With the energy of a person who becomes newly engaged two days after leaving rehab, 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 zero experience in the excavation of rare metals.
The Hycroft Mining Holding Corp. owns the 71,000-acre Hycroft Mine in northern Nevada, which is thought to possess “some 15 million ounces of gold deposits and some 600 million ounces of silver deposit,” according to The Hollywood Reporter. AMC Entertainment has purchased a 22% stake in the company, and Adam Aron, the chairman and CEO, sounds positively manic about the decision.
“To state the obvious, one would not normally think that a movie theater company’s core competency includes gold or silver mining,” he said, in what was described as an attempt to calm surprised stock holders. He then went on to explain how the company’s lack of experience would present no issue:
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“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.”
Speaking of share prices, AMC’s own stocks are down 50% so far this year, and remain at about half of what they were valued at in 2017. The theater chain was facing challenges even before the pandemic, and although it benefitted from Reddit meme stock status in 2021, even novelty investors have grown anxious about a box office still struggling under the burden of COVID-19. In 2021, the global box office was only about half of what it reached in 2019. While The Batman is doing well, especially by recent standards, it’s too early to say if 2022 will be significantly better than the year past.
There, too, Aron sees cause for optimism. “The strength of Spider-Man: No Way Home and The Batman, as well as 2022’s promising industry box office, heighten AMC Entertainment’s conviction that we are on a glide path to recovery,” he said. What a lovely phrase — “glide path to recovery.” And all this talk about easy money is especially reassuring coming from the mouth of a man who just bought a large stake in a gold and silver mine despite no idea how to run it.
This is just AMC’s latest innovation, and like other recent changes, it’s meeting with mixed reviews. Earlier this month, AMC confirmed that it was charging more for tickets to The Batman than for other films.