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Exclusive-AMC CEO says more meme-stock powered deals are coming

(Reuters) - AMC Entertainment Holdings Inc Chief Executive Adam Aron said the movie-theater chain would embark on more "transformational" deals to capitalize on the interest of retail investors following its bet on a troubled gold and silver mine operator.

AMC unveiled a $27.9 million investment for a 22% stake in Hycroft Mining Holding Corp about two weeks ago, an unusual deal for a company operating more than 900 theaters worldwide that raised eyebrows among market observers.

AMC's investment called upon a $1.8 billion "war chest" it raised in 2021 by selling its shares in the open market, in part on the back of retail investors who turned it into a popular 'meme' stock.

Aron said he expects AMC's investment, which includes shares and warrants, to be "lucrative." The deal was disclosed March 15, the day after Aron's tour of the company's mining operations in Northern Nevada outside Winnemucca, not far from the site of the annual Burning Man arts and music festival.

Some analysts questioned AMC's investment, expressing concern that the bet is far afield from the company's core competency and wondering whether the money could be better spent repaying the chain's debt, which exceeded $5 billion at the end of 2021.

Aron said in a phone interview from a limousine in Los Angeles en route to the Academy Awards on Sunday that AMC's investment in Hycroft had done well from the start. AMC bought Hycroft shares at $1.07, and they were trading at $1.32 last week.