AMC Entertainment (NYSE:AMC) shares have been hammered over the past couple of weeks as the carnage in the broader market unfolds, driven by a relentless inflationary impulse and the attendant hawkish tilt of the Federal Reserve. Against this backdrop, AMC announced its earnings for Q1 2022, managing to exceed expectations on the top-line and the bottom-line metric. To wit, the company reported $785.7 million in revenue, exceeding consensus expectations by over 5 percent. Similarly, AMC reported an adjusted EBITDA of -$61.7 million, corresponding to a year-over-year improvement of $233 million. Crucially, AMC now expects to record sequential improvements in its cash burn, culminating in a positive operating cash flow in the fourth quarter of 2022. During the earnings call, AMC’s management defended its seemingly aberrant stake in Hycroft Mining (NASDAQ:HYMC). As a refresher, the movie theater chain recently acquired a 22 percent stake in the troubled mining company, unlocking $527.9 million in additional financing from the likes of Eric Sprott as well as an At Market Issuance Sales Agreement with B. Riley Securities, which allows the company the opportunity to sell $500 million worth of common shares via periodic offerings. AMC has already recorded a mark-to-market gain of $63.9 million in Q1 2022 against an initial investment of $27.9 million in Hycroft Mining. As we had noted previously, this investment gives AMC a very cheap call option on gold’s ascendancy in the current commodities’ super cycle. On the NFTs and crypto front, AMC’s management noted that it now offers 8 different NFT-related programs, which have helped stimulate additional sales. Moreover, alternative payments, including cryptocurrencies, Apple Pay, Google Pay, PayPal, Bit Pay, and Venmo, among others, now represent around 35 percent of total online sales for the company. Inarguably, one of the most interesting tidbits arrived toward the end of AMC’s earnings call when Aron addressed the grievances of retail traders against the supposedly rigged market structure: Noting the various pieces of advice that have been circulating on Twitter to burn AMC’s short-sellers, including a theoretical scheme to issue NFT-based dividends, Aron then promised to “pounce” on short-sellers at an opportune time: The market seems to have taken a favorable view of AMC’s earnings, with the stock registering a gain of nearly 4 percent in extended trading. However, year to date, the stock is down nearly 50 percent.
