What happened
After struggling theater operator and retail investor favorite AMC Entertainment (AMC -3.05%) invested almost $30 million in Hycroft Mining (HYMC -1.07%) last month, shares of the struggling miner soared. The miner's stock has jumped more than 40% since that announcement. But that gain was even higher yesterday as shares of Hycroft were down 10% today as of 3:03 p.m. EDT.
So what
One item of note may be contributing to that move. Retail investors who track AMC and its status as a meme stock cheered the investment made by its popular CEO Adam Aron. Those same investors may have been disappointed when Hycroft announced yesterday that an officer from AMC will now have a seat on the mining company's board of directors -- an officer who isn't Adam Aron.
Image source: Getty Images.
Now what
On March 15, 2022, AMC announced it had invested $27.9 million in cash for a 22% stake in Hycroft, which owns the more-than 70,000 acre Hycroft Mine in northern Nevada. The investment was touted as a way for AMC to diversify from its movie theater business and utilize its retail investor base to help the miner navigate its precarious financial position.
AMC was also at risk of bankruptcy before that investor base helped rally its shares and allowed the company to raise enough capital to continue operating as it recovered from pandemic impacts. After AMC announced the Hycroft investment, some investors jumped into the miner's stock hoping to see its shares rally with the support of AMC CEO Adam Aron. But Aron won't be joining Hycroft's board of directors. That spot will be filled by Sean Goodman, AMC executive vice president and CFO.
That clearly disappointed the retail trading crowd to which Aron has become somewhat of a cult hero. Those traders are showing their disappointment today by dumping Hycroft shares.