AMC Entertainment (NYSE:AMC) CEO announced that the company has contacted both FINRA and the NYSE to look closely at the trading of their stock.
“Many of you, and we, are aware that AMC Entertainment has been on ‘The Threshold List‘ for 3+ weeks, indicating a number of FTDs.
Some of you may be pleased to learn that we have contacted both FINRA and the NYSE asking that they both look closely at the trading of our stock.”
AMC failure-to-delivers (FTDs) have been begun to rise again.
FTDs topped 6.8 million in February (non-cumulative), amounting to more than $36 million in failed to close orders.
The data is still being reported which means there’s a possibility we may see higher FTDs once February’s entire month has been processed.
Now AMC’s CEO Adam Aron is demanding FINRA and the NYSE to look into the company’s alarming FTDs.
FTDs, or Failure-to-deliver occurs when one party in a trading contract (whether it’s shares, futures, or options) fails to deliver on their obligations.
These failures derive due to buyers not having enough money to take delivery and pay for the transaction at settlement.
In the case of sellers, it means not having the goods to meet that transaction.
Failure-to-delivers can occur in options trading or when selling short naked, per Investopedia.
According to Investopedia, AMC failure-to-delivers can also occur if there is a technical problem in the settlement process carried out by the respective parties (clearing houses).
Investors say there’s a major conflict of interest when Citadel Clearing LLC processes retail orders worldwide.
Adam Aron Demands FINRA and NYSE Look into AMC Stock
Ever since the Genius Group (GNS) CEO Roger Hamilton publicly began calling out short sellers and #NakedShorts, AMC shareholders have been hoping for Adam Aron to also join the fight.
While Adam Aron may be binded to what he can and cannot say, this is the closes we’ve see the CEO to join shareholders in an activist role.
The CEO has been criticized for not speaking out on market injustices, even after skyrocketing reports of FTDs in the company stock.
And although the CEO has said in the past he has never seen any signs of ‘synthetic shares’ floating around, today’s news requesting FINRA and the NYSE to look into the company stock is a massive win for activist investors.
There is no longer denial, now there is acceptance of an important part of market structure that must be thoroughly investigated by our regulators.
But I’m curious to know how you feel about this investigation.
Do you think this will lead Adam Aron to dive into the rabbit hole?
Do you applaud the CEO for taking this unexpected approach?
Leave your thoughts in the comment section down below.
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