The last time AMC made the list, it stayed on it for an entire month.
This is the third time the security has been listed on the threshold list this year.
In April, The SEC (Securities and Exchange Commission) violated the 13-day threshold rule, which states that a broker-dealer with fail-to-deliver positions for 13 consecutive settlement days must immediately close out the ‘FTD’ position by purchasing shares in the open market.
AMC should have seen big buying pressure but instead plunged after it was removed from the threshold list.
CEO Adam Aron 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.”
But investors never received an update after the announcement and the stock is back on the threshold list, alerting investors of high FTDs and continued naked shorting in AMC stock.
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.
Nasdaq Has Reported Unusual Put Option Activity in AMC Stock
Back in April, Nasdaq reported very unusual AMC Entertainment put option activity.
According to the report first picked up by Fintel, a rather strange $781.04K block of Put contracts in AMC Entertainment was bought with a strike price of $11.00/share, expiring on April 21, 2023.
Fintel tracks all large options trades, and the premium spent on this trade was 5.07 sigmas above the mean, placing it in the 100.00 percentile of all recent large trades made in AMC options.
Today we’re seeing big sell walls around $4-$5 per share.
But retail investors have noticed AMC Entertainment stock has experienced unusual put option activity ever since the ‘meme stock’ frenzy in 2021.
The derivatives market has been a back door for institutions to flood AMC stock with put option contracts, in one form suppressing the stock from rising or simply having a greater advantage than average investors.
Still, the unusual put option activity in AMC Entertainment stock shows just how aggressive institutions are fighting to keep shares from rising.
AMC stock is currently up +3% this year-to-date but down more than -71% in the past year.
Extremely High Cost to Borrow Fees
AMC’s max cost to borrow reached more than 1,000% (1.05k%) in April before deflating.
However, AMC’s cost to borrow is quickly rising, currently being reported at 400%, respectively.
The cost to borrow, per Ortex, is the annualized percent of interest on loans, typically borrowed by brokers and hedge funds.
This percentage figure may change on a daily basis and level out through its ‘cost to borrow average’.
According to the Securities Lending Agreement (SLA), this fee must be charged prior to the stock being borrowed.
Short sellers rely on brokers to have stock shares available to borrow.
AMC Entertainment is in high demand, both for short sellers and long investors.
AMC’s short interest has also risen in the past week; currently at 24%, updated daily here.
Hedge funds continue to bet against the movie theatre chain company although AMC Entertainment is no longer a screaming short.
High box office numbers today are indicating big growth for AMC Entertainment.
Analyst Names AMC Amongst Most “Squeezable” Stocks
“As the broader stock market has been on a tear for about a month, things are looking grim for investors with big short positions in stocks like AMC Entertainment Holdings Inc. and GameStop.”
But retail investors point out that the constant manipulation in these stocks is keeping shares from rising exponentially.
And they’re right — naked shorting, dark pool trading, off exchange trading, spoofing, and short and distort have all played a role in suppressing AMC and GameStop shares.
We’re now seeing AMC back on the NYSE Threshold Securities List for a big reason.
Yahoo Finance says the reason why stock tickers make it on the NYSE Threshold Securities List is due to market manipulation through naked shorting.
Mainstream media and Wall Street personalities have managed to brush aside this very big issue in the market but it’s no longer a secret that counterfeit shares are used to provide ‘liquidity’ in the market.
The incredible thing is that ‘meme stocks’ aren’t the only stocks in the market experiencing naked shorting or price manipulation from short sellers.
This is a very big problem; how long will the SEC and other regulatory bodies continue to ignore it?
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