Share Dilution

HYMC STOCK FORECAST: AMC Entertainment Holdings is keeping HYMC afloat. Will it increase further?




HYMC Share Prediction: Latest Price

HYMC Stock Forecast: Performance Chart

Action name

One day

5 days

1 month

6 months

1 year

-3.77%

76.92%

641.94%

53.33%

-41.77%

HYMC Stock Forecast: Support and Resistance

Source

Support

Resistance

Recommendation

$1.79(S3)

$2,654 (R1)

To buy

$1.37(S3)

$3.38(R1)

To buy

HYMC Stock Forecast: Google Trends

HYMC Stock Forecast: Bullish Case

  • World of Meme Stocks- The stock word “meme” was coined last year with the GameStop (GME) cult on the reddit platform. The list quickly grew with Blackberry (BB), AMC Entertainment (AMC) and Bed, Bath and Beyond (BBY) being the latest additions. The newest addition to the list is Hycroft Mining Corporation, which is up 641.94% in the past month. The rally in meme stocks is becoming more sustainable lately, as institutions and retail investors learn how to manage these meme stocks and derive long-term profits from them.
  • Equity investment by AMC Entertainment Holdings and Eric Sprott- Hycroft Mining Corporation secured a private investment from AMC Entertainment Holdings Inc. AMC and Eric Sprott purchased a 22% stake in Hycroft with the issuance of 46.8 million units, consisting of one common share and one a stock warrant. The total investment amount is $55.9 million. Apart from this, the company also introduced the Money Equity program and completed it on 28.3.2022. The company sold 89.5 million shares at an average price of $1.54 for a total value of $138.6 million. Combined with the private placement of AMC and Eric Sprott, the total amount raised against stock dilution is $194.4 million. The total number of outstanding shares of HYMC to date is 196.8 million shares.
  • Hycroft Mining has an excellent site in northern Nevada- Hycroft Mining Holding Corporation owns a large mine site. It owns 71,000 acres of land in northern Nevada, which has 15 million ounces of gold reserves and 600 million ounces of silver reserves. It has faced many challenges over the past two years in the mining sector due to liquidity constraints, but with the new injection of capital with equity investments, it will help the company approach mining with a new approach and the latest technologies. This will help unlock the potential of vast reserves and increase revenue and profitability in the coming quarters.
  • HYMC stock is trading at very cheap valuations- Hycroft Mining was at bankruptcy level two weeks prior and has seen a major turnaround in the past two weeks. AMC Entertainments main motivation behind the investment is that it is trading at very cheap valuations and sees major upside potential ahead. Also surprising, the return on investment for AMC came very quickly than expected. Over the past five trading sessions, HYMC stock has risen 76.92% and its market capitalization has increased from $19 million at the beginning of March to $250 million as of March 29, 2022. The stock is trading at 2 $.30 as of 31.3.2022 and may have major upsides ahead as trading volume grows at all high levels of 160 million per day.
  • Russian-Ukrainian War Will Keep Precious Metals Rates High – Hycroft Mining’s main business is gold and silver mining and the rising prices of these precious metals are in favor of the company. In the current scenario, the world is shaken by the protracted war between Russia and Ukraine and this has affected the world of commodities across the globe. This war created a panic and an environment of uncertainty which propelled the prices of crude oil as well as those of gold and silver and all other precious metals. In times of war or more particularly in times of uncertainty, the stock market sees a sell off and the commodity market sees new buys as they are considered safe investments. HYMC is a kind of stock related to gold and silver mining and will surely benefit from the current global scenario.

HYMC Stock Forecast: Technical Chart

Also Read: AMC Stock Forecast

HYMC Stock Predictions: Latest Video

HYMC Share Forecast: Bear Case

  • A company with bad fundamentals- A popular stock market proverb says that in the short term it’s about traders’ long and short positions and in the long term it’s about the financial strength of the company. The current frenzy can quickly die down if investors take a look at the company’s balance sheet. In fact, the company hasn’t made a profit since 2013. It’s a loss-making company that desperately needed money and AMC Entertainments came to save it and nothing more. Hycroft’s recent gains will only be sustainable if the company posts profits over the next few quarters. Net profit is around -29 million dollars in the last four quarters, which is not a good sign for the company.
  • Over-dilution by Hycroft Mining- For starters, it’s good that the company raised $194.4 million to emerge from bankruptcy, but diluted its equity to a very large extent for the same. HYMC stock now has over 196 million shares outstanding in the market. Additionally, by combining AMC Entertainment and the recent ATM stock offering, the company lost more than 60% of its hold on the company. The management of a company should have a greater stake in the capital of the company than the positions of other investors. This is not the case with HYMC and it is not a healthy sign for the company.

HYMC Stock Forecast: Conclusion

For starters, it looks like HYMC is off the hook in the short term. Also, it cannot be considered a penny stock with the recent increase of over 641% in the last month. Certainly, the proceeds from the equity investment will be used for refinancing, debt reduction and repayment extension to 2027. It will also contribute to capital investment in mining to increase revenue and profitability. .

But these are future prospects that bear no resemblance to the company’s current position. To date, the fact is that Hycroft mining has not generated a single penny of profit since 2013 and this is something that cannot be ignored before making an investment decision. Overall, HYMC shares are for meme and short-term traders, who know how to handle the huge volatility driven by news and media, and not for long-term investors who are looking at least until they improve their balance sheet.

HYMC Stock Forecast

-Vineet Agarwal

Note: Crowdwisdom360 gathers forecasts and data from all over the net and has no internal views on likely stock or cryptocurrency trends. Please consult a registered investment advisor to guide you in your financial decisions.