“The tale of the tape,” is a common phrase in the investing world. In simple terms, it refers to the price and volume action of a certain equity over a period of time, as a measure of how a certain event, or lackthereof, may be perceived. When it comes to Hycroft Mining (NASDAQ: HYMC), the firm that today saw theatre company AMC Entertainment (NYSE: AMC) take a 22% stake in, the tape most certainly does tell a tale.
For instance, would you believe that today, the day of the announcement of the AMC Entertainment investment, wasn’t the highest volume day for Hycroft Mining in the last week? That title in fact goes to March 11, when the company traded a total of 340.23 million shares, as compared to the 322.27 million shares that traded hands following todays announcement.
Oddly, if you want to say there’s anything “odd” about the timing, is that this volume is not normal for the company. The Friday before last the company traded 3.72 million shares, and before that, just 464,200. In fact, the three month average volume of the firm, which is undoubtedly skewed by the last week, is 14.92 million, while the ten day average volume is 88.01 million.
Call options in the name also spiked in recent days, as highlighted by Twitter user @Keubiko. Most notably, the options expire this week, meaning traders expected a near term event to lead to a sudden price rise.
The timing of the volume in fact is so odd, the Adam Aron, the CEO of AMC Entertainment, was evidently advised by lawyers to not appear on two different television shows today, as he stated this afternoon on Twitter. While Aron referred to todays volume, its likely that it was actually last weeks volume that kept him off air.
And then, there is the issue of the “apes.” One in particular, Twitter user @TaraBull808, has found themselves in quite the predicament. The fervent AMC bull today got caught in a pickle after commenting on the announcement within Adam Aron’s Twitter feed, wherein she stated she added 20,000 shares to her current position of Hycroft. A position that coincidentally was first initiated last week.
And when she was questioned on her sudden decision to buy the former gold and silver producer, whom had to halt production because of uneconomic grades, her response was.. less than satisfactory.
Evidently, the AMC bull’s decision to acquire Hycroft was based on the nickel squeeze and the actions of the London Metals Exchange last week, despite the company having zero to do with nickel. To be fair, she did tweet about the nickel events once. Regardless, the AMC apes appear to be running with the story that they acquired the former gold producer as a result of the nickel squeeze.
Whether she actually bought shares, or is instead broadcasting to the market that she previously bought shares so as to look like a talented investor, is anyone’s guess. Her comments specifically on insider trading were however somewhat incriminating, when she commented that “congress and hedge funds can engage in insider trading, but God forbid retail make money.”
Whatever the case may be, the news did little for the actual equity price of Hycroft. The name, which began last week at $0.33 per share and closed the week out at $1.88, did little for shareholders today relative to the week prior. After opening as high as $2.71 per share, it ultimately closed at $1.52, just off the low of the day as those who purchased the equity last week likely unloaded into the volume of the day. The equity settled at a 9.35% gain on the day overall.
Whether any actual tipping or leaks occurred related to the news is up for debate, but the fact is, is that todays action likely wasn’t what investors had expected.
Information for this briefing was found via Edgar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.