Meme Stock Hycroft Sued for Diluting Bankruptcy-Related Warrants

An investor sued Hycroft Mining Holding Corp., claiming the struggling mine operator—which went bankrupt in 2015, merged with a blank-check company in 2020, and became a “meme stock” after AMC Entertainment Holdings Inc. bought a stake—is diluting loyal longtime shareholders.

The lawsuit, filed Monday, accuses the company of failing to make “mechanical adjustments” required by its pledge to avoid diluting warrants worth 17.5% of the business that investors received when the former Allied Nevada Gold Corp. emerged from bankruptcy reorganized as Hycroft.

Shareholders secured the anti-dilution promise by challenging the original terms of Hycroft’s reverse merger with Mudrick Capital Acquisition ...