AMC Entertainment Holdings Inc (NYSE: AMC) shares are up nearly 30% on Monday after CEO Adam Aron made a comment that again spiced up retail interest in the stock.
AMC to make more transformational deals
Speaking with Reuters over the phone, Aron said the company’s $27.9 million “transformational” bet on Hycroft Mining Holding Corp (NASDAQ: HYMC) wasn’t going to be a one-time event.
I’d like to think there will be more third-party external M&A announcements going forward where AMC can reach for the stars and intriguing investments that have potentially attractive returns.
The return on the world’s largest cinema chain’s investment in Hycroft has been phenomenal so far. It bought HYMC at $1.07 a share versus $1.94 a share at present.
CEO Aron defended the Hycroft investment
AMC’s deal with the hard-hit mining company met with skepticism last week as it wasn’t even remotely relevant to AMC’s core competency. Still, CEO Aron is confident that a 22% stake in Hycroft will be lucrative.
Transformational M&A is mandatory. Our shareholder base has given us capital to deploy with the clear expectation that we are going to do exciting things with the money they entrusted to us.
According to the chief executive, the $28 million bet was rather small compared to the total cash that AMC has at its disposal. He, however, reiterated that the company will also continue to strengthen its core business.
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