Community, some of you have been reaching out to me via Discord and Twitter regarding this topic. If you too have been wondering how AMC Entertainment stock continues to be shorted, well this is going to answer that for you.
Hedge funds have found a loophole that allows them to short bonds. They’re able to convert these bonds into stock but more on that later.
However, Adam Aron is fighting back. He’s issuing an S-3 filing that could potentially put a stop to this dirty trick in the book. Or so we thought.
New information has been confirmed that AMC has no outstanding bonds since Silverlake cashed in. However, I’m going to leave this article where it is because there’s a lot of great information regarding ‘terms’ and ‘definitions’. Some excerpts have been deleted to protect the community from spreading misinformation.
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What are convertible bonds?
Convertible bonds are corporate bonds that can be exchanged for common stock in the issuing company. The holder of these bonds has the option to exchange them for a predetermined number of shares in the issuing company.
What is an S-3 filing?
An S-3 filing is simply a regulatory filing through the Securities Exchange Commission (SEC) that provides simplified reporting for issuers of a registered security.
What is a convertible hedge?
A convertible hedge is a tactic where short sellers take a long position in a company’s convertible bonds, and a simultaneous short position in these bonds.
According to Investopedia, convertible hedges offset the stocks price movement when the conversion amount of the stock is shorted.
This ladies and gentlemen is how hedge funds have been able to continuously short stock in the past behind closed doors.
Knowing these facts shouldn’t necessarily hype you up for AMC per say. It should however increase your knowledge database. The more you know, the more you’ll be ready.
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Read: How high can AMC stock price skyrocket up to
Community, I’ve removed a lot of the misinformation that was spread within the community regarding the DD on shorting bonds. I want to make a sincere apology for the inconvenience. Thank you to everyone who reached out, as well as the community leaders who respectfully and thoughtfully make this public. The terms and definitions will be left on here because they’re great information for your database. Love you guys, see you on the next one. 🦍🍿🦅
Hello Frank,
AMC vice president investor relations said they currently don’t have any convertible notes. Refer to Matt Kors’ video.
Thanks,
Hey Bryan – yeah I just saw Trey tweeted this info is more ‘housekeeping information’. A lot of apes brought the DD to my attention and so naturally I translated it for the community. Thanks for commenting
Thanks for keeping us informed Frank. I really enjoy reading your articles. I have been visiting your page everyday since I found you through google. It keeps me thinking positive about the whole AMC situation. I have a lot of AMC shares.
Thank you for your hard work.
Bryan,
It makes me happy to hear my articles have brought you great value Bryan. Thank you for being a reader 🤝✨
Tough times never last,
TOUGH APES DO!!!
As always great read Frank!
That’s right brother! 🦍 and thank you 🤝✨
https://youtu.be/D03yi_3cOK0
Legendary! 🦍💥🍿
FR, I call it, “ Frank Enters Chat”
💀 I’m humbled 💯
Matt K said no?
Regarding what brother?