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- AMC has announced the acquisition of 22% in Hycroft Mining Holdings for a $27.9 million investment.
- AMC witnessed a surge in stocks in June 2021, climbing to an all-time high of $59.26, and since then has only seen a downfall.
- With a past of backing crypto cause, AMC has ditched crypto for the precious metal mine.
In an announcement, AMC revealed that it is acquiring a 22% acquisition in Hycroft Mining Holdings for a $27.9 million investment. Adam Aron, CEO of AMC, commenting on the deal, says that he finds parallels between the current situation of Hycroft and AMC in the past year. He further states that the investment can prove to be beneficial to both firms.
It looks like AMC is more inclined towards precious metals over cryptocurrency.
AMC has always supported the crypto cause since its meme stock revival; for instance, it recently announced that it would be accepting Dogecoin and Shiba Inu, and therefore, it is being said that AMC underplayed with its investment in Hycroft.
Analysts Forecast More Challenges For AMC
Both GameStop and AMC were the beneficiaries of the WallStreetBets movement, which targeted greedy institutional short-sellers to teach them a lesson.
In June 2021, AMC stock experienced a hike, achieving an all-time high of $59.26. However, since then, it has been downhill for the chain.
The analysis of the annual financial results of AMC reveals that year revenue is up 103% to $2.53 billion ending December 31, 2021. It still fell short, stopping at an amount less than half that of 2017, 2018, and 2019.
In addition, the net income, which is increased by 72% for 2021, is still facing a $1.27 billion loss. The company is still unprofitable even though the WallStreetBets movement hindered the bottom line.
According to Forbes, despite the downhole, the loyal investors are holding on in the hope for a return, creating a great base “for the stocks to suffer a meltdown.”
Why AMC Prefers Gold Over Crypto?
In the aftermath of the pandemic, people preferred sitting in homes instead of going to the cinema. At the same time, AMC is up against it about convincing people to return. With inflation, the situation worsens.
It was expected of AMC to grow its digital asset operations as the reaction to the situation, the crypto as a safe haven has come under the radar. Therefore, it was no surprise that AMC favored gold against crypto.
Some hail this move of AMC as the precious metal is backed with years of history. On the other hand, Bitcoin hasn’t been able to prove itself in the situation of an economic collapse. The investment in Hycroft is being seen as safe gameplay by AMC.
ALSO READ: How To Mine Crypto Without Deep Diving Into It
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
