What happened
Shares of AMC Entertainment Holdings (AMC -11.52%) look like they're about to break their winning streak as shares are down 6.1% at 1:22 p.m. ET.
Of course, it looked that way yesterday, too, as the stock had stumbled out of the gate and trading in its shares were halted by the New York Stock Exchange after it triggered a circuit breaker. Once trading resumed, AMC's stock quickly reversed course and it ended the day $0.11 per share higher.
Image source: Getty Images.
So what
AMC has been on a meteoric tear since the theater operator announced it had invested in a gold and silver miner, with eight of the 10 trading days notching gains. On Monday alone the stock rocketed 45% higher.
That came on the back of the news that AMC might go on a new shopping spree. AMC CEO Adam Aron told Reuters "transformational M&A," or mergers and acquisitions, are going to be part and parcel of the movie theater stock's DNA going forward as it attempts to leverage the experience it gained during the pandemic.
Aron said he believed other companies could benefit from the lessons it learned as a cash-strapped company raising money and turning its business around, and the first student was gold and silver miner Hycroft Mining, which raised a total of $195 million as a result of AMC's investment.
Now what
AMC Entertainment looks like it wants to be more than just the world's biggest movie house, and instead sees itself as a venture capital operation.
While its self-styled "apes" -- the small retail investors who have backed the stock and held firm over the past year -- cheer on the transition, other investors might want to consider whether investing in a string of financially distressed businesses is the best course of action over the long haul.
