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Hycroft stock saw spikes in price, trading volume ahead of AMC deal

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The huge Gold and Silver Allied Nevada Hycroft Mine is located near Sulphur, Nevada. It’s close to Gerlach and Sulphur.

Federica Grassi | Moment | Getty Images

Hycroft Mining HoldingA small mining company with a troubled financial history,In the days preceding the announcement, the stock price and trading volumes of the movie theatre chain saw huge spikes AMC EntertainmentThe company had purchased a significant stake.

Hycroft’s shares rose about 12 percent Tuesday to $1.55 after previously exploding even further. The parties in question have not been charged with any illegal or unethical activities.

AMC CEO Adam Aron cited Hycroft’s volume and legal advice when explaining why he cancelled a Tuesday morning interview with Jim Cramer (CNBC) and David Faber (CNBC). Aron posted, “I’m excited about our investment HYMC. But there has been such a lot of volume today in that stock, lawyers insisted I keep off air.”

CNBC Analysis of FactSet Data revealed that Hycroft’s 90-day average trading volume was about 355,000 on Tuesday, March 1. Over the following two weeks, this average would increase significantly.

  • Trading volume spiked on March 4th. On March 4, more than 3 million shares were traded, pushing the average daily trading volume to over 400,000 shares.
  • Trading volume increased to 6.2 million shares by March 7. Next day, it reached 202.7 million. The 90-day average reached 2.8 million shares.
  • On March 9, Hycroft traded 46 million shares. Extreme volume spikes were seen in the next days: 220,000,000 shares of Hycroft were purchased and sold March 10th, and 341.4 Million were traded March 11th.
  • The 90-day average was 9.9 millions at the closing of March 11. On Monday, just days before AMC made its announcement, there were 58.6m shares traded and the average 90-day share count was 10.5m.

From March 4 to March 15, the average daily volume was 144.9 millions shares. The daily volume average for the period from February 22 through March 3 was less than 800,000. Shares were traded on eight days. According to FactSet, Hycroft holds 60.4 million outstanding shares.

CNBC reached out to representatives from Mudrick Capital and AMC, large shareholders in Hycroft. Securities and Exchange Commission (the leading regulator of U.S. stocks markets) declined to comment.

Hycroft also saw a rise in share prices from 33 cents (March 7), to $1.88 (March 11). The shares were closed on Monday morning at 1.39

AMC will pay $27.9million in cash to complete the transaction. AMC will be receiving approximately 23.4 million shares and equal amounts of warrants. AMC would become the owner of approximately 22% of Hycroft through this deal.

These shares are being purchased by the movie theatre at $1.19 per piece. The closing price of Hycroft shares Monday was $1.39, nearly 400% higher than the February 17th low of 28c per share. On March 3, shares were trading at 29 cents each, which was the closest to this stock low.

Shares rose to $2.72 per share early Tuesday morning, but closed at $1.60 in midday trading. This was a 15% increase.

Aron, AMC’s CEO was scheduled to appear on CNBC Tuesday morning. However, he decided to cancel his interview saying that he didn’t feel comfortable speaking publicly about the decision due to volatility in Hycroft stock.

AMC refused to discuss beyond what Aron stated in the press release. But Aron later tweeted his apology to Faber, Cramer, and Faber about cancelling his appearance.

Hycroft, meanwhile, said in NovemberIt will likely have to raise extra cash to cover its financial obligations for the following year.

The company also laid off over half its employees at the mine it owned in Nevada. It also stopped all mining operations. The company claimed that the company would concentrate on processing silver sulfide and gold sulfide. a report from the Elko Daily Free Press. Hycroft’s Corporate Offices are located in Denver.

— CNBC’s Chris Hayes contributed to this story.

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