A new proposal by CEO Adam Aron has been circulating the retail community where shareholders will get to vote on the conversion of APE equity to AMC common shares.
Shareholders are anticipating short sellers will close their positions in APE if the conversion to AMC common shares is approved.
While no official voting proxy has been distributed amongst shareholders, the talks are certainly on the table.
A second proposal will allow shareholders to vote on a 1-for-10 reverse stock split.
So far, more than 72% of shareholders said in a poll they’d vote ‘YES’ for the split.
You can read more about what a reverse stock split signifies for a company here.
Will shorts be forced to close their positions in APE if the conversion is approved?
There’s a very strong probability of that being the case.
Let’s discuss it.
Related: How Big Could an AMC Short Squeeze Potential Surge?
What Happens to Shorted Stock During a Merge?
In the case of APE and AMC, the merge between the equity and common shares may temporarily increase the share price of AMC stock.
This is where short sellers are caught in a bind.
Short sellers betting against the company would see big losses during the surge of the newly reflected share price.
Short sellers will have the option to close out their positions completely prior to the conversion or keep holding their position.
While they will not be obligated to close out their positions, they are at higher risk from momentum taking over and further escalating rising share prices.
Here is where shareholders have the opportunity to buy in heavily to keep short sellers from only pushing the price down after the merge.
As short sellers begin to fear the tide turning against them, the buyback of shares will result in a short squeeze.
If shareholders fail to create momentum, then short sellers may identify weakness in buying power and further add to their short positions.
Is an APE Short Squeeze Over?
Not quite.
There’s a strong possibility short sellers close their positions in APE prior to a conversion (if approved by shareholders).
In doing so, they avoid seeing share prices rise and the probability of having losing positions during the merge.
APE momentarily became the #1 most short stock according to Yahoo Finance.
In the past week, APE has surged more than 150% with heavy buying volume.
Is it possible this was caused by a few shorts closing?
Perhaps, but an APE short squeeze prior the conversion is still very possible.
Despite so much market uncertainty happening today, both AMC and APE have fair shots at squeeze short sellers from their positions.
So far, this has been one of the biggest catalysts for a short squeeze.
But it’s going to require retail investors to play their part.
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Are you holding AMC and APE?
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About The Author
You seem to be pretty sure of yourself. However, can you give us one example of a reverse split that has caused a short squeeze?.
Greetings Frank,
I have come across a very disturbing concept that explains that from the way that APE was written up, that it was written to be a Depositary Note (note a stock share) that is called a “Preferred Equity Unit” which has only 1/100 of the value of the Class C Stock Unit of AMC. And this source explains this was the purpose that Adam Aron had with this all along to try to help the hedge funds get out of debt and lower the float (e.g. by a reverse split) which would allow him to sell more shares to make all the money he needs to get himself out of debt for AMC but which would complete destroy any possibility of having the MOASS or short squeeze! You can view this entire video about what I am referring to here:
AMC APE Preferred Equity Unit The Truth Revealed
https://www.youtube.com/watch?v=r1ix-pxQFKU
And, at the end, he even suggests that the only way that we can preserve the value that APE has right now is by voting No on all three propositions. And that is based on the idea that: 1.) the conversion from APE to AMC will only be exchanged at 1/100, 2.) it will then reverse split form 10:1 as another reduction, and 3.) it will continue produce the mechanism of fund raising that will allow Adam to pay the debt of AMC but lower the price of AMC shares and at the same time allow the Hedge Funds to buy back their short interest positions at minimal loss to no loss.
So what do you think about all this?
Mike De Vries
MIKE!!! you reckless idiot…. all wrong… im not even checking out the dumbdumb video that you linked…. Read it again or get the funk out of my investment… Voting yes is how we squeeze shorts… There is no other way… Upon a conversion and a reverse split the CUSIP numbers change forcing shorts to close positions it’s as simple as that Anything less than that is retarded…
Oh yeah, And when shorts close apes get rich and it doesn’t matter after that…… How in the h*** did any investor at this point get so dumb….
1. From not doing their own due diligence
2. Being a paid shill like Mike
3. Listening to some idiot on YouTube
4. Not having an operational brain in their skull
Apes vote yes because it’s recommended in the proposals and it squeezes the shorts out of both tickers simultaneously…
It’s real simple if you don’t want shorts to close their positions you vote no… If you do warn it to squeeze and you want shorts to close their positions vote.,vote YES..
CSI made the point that it will be telling to see if AA proposes to do the RS six weeks after combing ape and amc. If AA puts in a time lag then he proves he is on our side and the Ftds don’t just get wiped out in the process like they would if both operations are done in one shot.
CSI doesn’t know his mobile home trailer park house from a dog kennel…. CSI is wrong…. If there is a delay from the conversion to the reverse split then it allows shorts to continue to short AMC after converted…. Why in the f*** would you not want them to close out…. Why would Adam Aaron let them close out 6 weeks later?
Both proposals will happen simultaneously there will be no delay because if there is a delay it would be like voting no…
The common sense involved in CSI’s determination was non existent like his position in APE OR AMC… CSI doesnt even own stock… CSI makes all the money he needs from the media company paying him to shill and lie about AMC….
YES YES YES is my vote because I am an APE and trust Adam Aron…
I don’t trust a trailer park crack head like the no Common Sense Investor..
https://twitter.com/CuttillEric/status/1608600132504940544?t=GcL3W-sE_-_GOG9lCe6JRQ&s=19
Sincerely,
Eric Cuttill
@CuttillEric
P.S. an investor must have actual “common sense” before calling himself the Common Sense Investor… because CSI has none…
They will still manipulate the price down. Nothing we can do about it unfortunately. Just a bunch of wa+#@£s
Phil… you are wrong… It’s funny how 90% of the comments are wrong… Did any of you read Frank’s article? Phil I bet that you have no ability to think for yourself or you’re not an ape or a retail investor for that matter. I believe that at this point if you haven’t figured it out you’re a detriment to the investor base and you should go and leave and never come back…..
Voting yes on all 3 is what is going to squeeze shorts and force them to close anything less than that is shillary…
The whole idea that the reverse split will cause moass and AA is doing it for us is clearly lies! Just another manipulation, plenty of shills bashing anyone that says anything remotely like “vote no,” let’s try to keep an open mind to the possibility whomever is writing “facts,” in these comments is not a real professional. If they were they’d respond to it on their own blog or platform, whatever. I think vote yes could be propaganda, who really knows? Has anything that has been done been good for APES in the last 18 months? ANY APES MAKING MONEY? I’m still not selling, not financial advice.
Another victim of the Common Sense Investor 👆
Listen my Real APES, unlike this Micheal douche.. Voting with proposals and AA is a must if you want shorts to have to close…. Im voting yes because i want the stock to squeeze….
Remember CUSIP numbers change forcing shorts to close with a yes vote. The conversion and the split will happen simultaneously and that’s how it’s gonna work…
FYI to all $APES… We are close and the shorts are easy to identify…. Any negativity or Fear Uncertainty and Doubt, at this point, is a desperate attempt by the shorts to save a couple bucks….. They are simply exposing more and more crime…. these criminals will be relentlessly pursued to bring them to justice…. Wallstreet stealing from the people is coming to an end…. #SicSemperTyrannis #WeKnow $AMC $APE
CUSIP numbers change in a reverse split as well, when there is a conversion…
This is, without a doubt, forcing short positions to close….
That is the facts and anything less, one needs not to accept…
The fear of this going sideways is not justified, and is only derived from ones own inability to process emotion correctly…….
Adam Aron has also had to fight bogus board members steady attempting to undermine him… He has recently got rid of a couple… there is one more named Phil that will be gone next year…. What AA has done is genius and almost super human… He is a blessing to $APES and the theater industry… the world for that matter….
I buy and hold AMC. Same routine for just over 2 years now. NEVER SOLD A SINGLE SHARE. When APE was released I did the same with that. Until the price rips I won’t sell. So I may just hold these shares to my grave. I don’t care either way. Come and get mine, hedgies. It’s gonna cost ya.
Don’t forget Dan, you will need to go with a yes vote in order for that price to go up, it’s the only to force shorts to close…
I believe they will keep their short positions open during the conversion, and split. We have seen that applying buying pressure is useless, I recall a Friday where everyone was encouraged to buy heavy, all they could afford. The price only went down, as it always does when we buy heavy. Lvl 2 shows a lot of spoofing.. As long as they control all aspects of the market, we will never see the squeeze IMO… A lot of predictions have come and gone over the last 2 years…. It will take someone in high power to force this play into action. Only thing that will happen is the price will rocket during the split transition, the time when no one can sell during, then the price will plumet just before we can trade it again… typical of a RS, then the we watch it go down slowly. APES need to realize the same criminals responsible for all this mess, are the same ones balancing the books during the RS transition… Do we honestly believe they will play fair???
Note this is just my opinion, but my observations so far have been that they started doing this with a lot of their short position stocks… Time will tell…. I have worked hard like alot of other APES to get my share count up, and average price down. Sad to think it will be cut in half. The community is split and divided, The perfect storm for defeat by the shorts… Divide and conquer.
Your first sentence tells me you have no idea what you are talking about. Shorts have no choice when CUSIPs change, but to close their short positions… in this case it would happen simultaneously on both tickers… your whole comment is false and a lie… Its openly telling at this point… all you have is crap points and nothing to offer base on things that wont happen…. this is a very particular corporate action with very specific rules and factors… none of which you could articulte in your regurgitated script… sad, desperate, and Im buying more of both…… Mark is a bot, a shill, or brainwashed….
I think that the prospect of having a negative asset (Sold Not Yet Purchased) on the books indefinitely is a nightmare scenario for a naked shorter. Those negative assets limit the margin a bank or brokerage will extend to the entire portfolio.
The company’s stock will be attractive to large investors once it’s profitable (paying off debt is job 1), then paying dividends. Issuing shares to close out debt is the way. Better to do that with (re) combined value of a stock that was incorrectly split in the first place (to quote your comment, “Divide and conquer”). APE was to have been a dividend, not a split, but brokerages “interpreted” the action as a split and hosed retail in the process. Remember the crazy Options Chains that were incorrectly set up for APE?
What a drama. AMC Biggums has a nifty couple of videos setting out pros and cons. Me, I prefer the short route to profitability and subsequent SQUEEZE.
There’s 3 things I know for a fact. 1. The fud and shills are everywhere and people I thought were trustworthy were not. 2. I believe that AA has the best intentions and a vested intetest in the price of our stock going up to wipe out the companies debt which will remove the short thesis so I will vote yes. 3. I eat crayons so what do I know.
Chris… I am with you on this.. And you are 100$ correct…. appreciate you..
No they wont be forced to close, are you kidding me? Since when are the rules followed in the criminal stock market?
Yes they will….. And if you don’t think so you should just get away from the stock market cause you don’t have the discernment level that you need to be investing…. You are wrong
Looks like this dude Eric Cuttill is a real overbearing jerk. I personally do not want to lose my stock count. They are multipliers. 60,000 is a higher multiplier than 6000. Just try to multiply each number by $100 per share and you will see this reverse split may not be the best thing for all investors.
Let’s start a discussion! Leave your thoughts below.