Day traders looking to capitalize on commodity price volatility catalyzed a chain reaction that ended with movie theater giant AMC Entertainment Holdings Inc.’s unusual deal to take a stake in a gold-mining venture, the Wall Street Journal reported. Hycroft Mining Holding Corp., which owns large gold deposits in Nevada, was on the verge of bankruptcy a few weeks ago before it caught the attention of meme-stock traders online and then of AMC CEO Adam Aron. The theater company, itself rescued from potential bankruptcy by enthusiastic online investors last year, bought 22% of Hycroft on Tuesday — a quickly executed investment that caught analysts and investors off guard and was hailed by Aron as a “bold diversification move.” Hycroft landed on AMC’s radar after a surge in interest from individual investors scouring social media for penny stocks that might be poised to benefit from the market volatility spurred by Russia’s invasion of Ukraine. Jason Mudrick, a hedge-fund manager and one of Hycroft’s top investors, saw an opportunity for the company to raise much-needed funding. It was down to just $8 million in cash. Mudrick’s eponymous hedge fund had also invested in AMC when the movie-theater chain was struggling to survive the COVID-19 pandemic, sparking interest among individual investors to do the same.
