AMC Entertainment (NYSE:AMC) is back on the NYSE Threshold Securites List.
The last time AMC made the list, it stayed on it for an entire month.
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 Reports Unusual Put Option Activity in AMC Stock
Nasdaq reported on Tuesday 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.
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.
Extremely High Cost to Borrow Fees
AMC’s max cost to borrow recently reached more than 1,000% (1.05k%), per Ortex data.
AMC’s cost to borrow average is currently reported at 928%, 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.
If the broker has very few shares of a stock available, then that stock is placed on the hard-to-borrow list, a list AMC Entertainment is currently on.
Stocks on the hard-to-borrow list may not be short-sellable or have higher stock loan fees, hence why we’re seeing AMC’s cost to borrow at 1,000%.
AMC Entertainment is in high demand, both for short sellers and long investors.
Analyst Names AMC Amongst Most “Squeezable” Stocks
S3 analyst says AMC Entertainment and GameStop (NYSE:GME) stock have the highest squeeze potential in the market.
“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.
We’re now seeing AMC back on the NYSE Threshold Securities List for a big reason, Yahoo Finance says the major cause is market manipulation through naked shorting.
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Everybody knows it’s total BS and manipulation but nobody in power will do anything to end it.
💯😤
Does it matter Frank? This Bullshit has been going on for 2 years. Someone is making a shit load of money and this corruption will go on for years.
Leave your thoughts below.
Corruption is so widespread they need to call on “THE ORKIN MAN”