AMC Entertainment (NYSE:AMC) short interest has surged to a new high this year per financial data firm Ortex.
As of Wednesday, AMC’s short interest sits at a high of 29.21% (updated daily here).
The movie theatre chain’s short score has also recently climbed to 95 earning a spot on the top 10 list of most likely ‘short squeeze candidates’.
According to Ortex, ‘Short Score’ uses a multi-factor model that incorporates multiple short-related metrics, with a higher score indicating that the stock is heavily-shorted and has other characteristics that increase the possibility of a short squeeze occurring.
This month AMC’s cost to borrow also soared over 1,000%, the interest hedge funds are paying annually to short AMC stock.
AMC ranked #1 on Companies Market Cap list of top 100 companies with the highest cost to borrow where more than 7,600 companies are listed.
Why is AMC’s short interest data important?
It all points to a potential short squeeze.
“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,” said Ihor Dusaniwsky, head of predictive analytics at financial technology and analytics firm S3 Partners.
“One factor that is also killing profits for short sellers is the borrowing costs on stocks that no one is willing to part with,” he continued.
Also Read: Goldman Sachs Gives AMC a New Price Target of $175
What’s Keeping AMC from Squeezing?
Aside from massive buying pressure, large trading in off exchanges could be suppressing AMC shares from rising.
More than 50% of AMC stock is now trading off exchange this month.
Gary Gensler announced last year that 90%-95% of retail orders do not go through the lit exchange.
We The Investors asked the SEC Chairman if dark pools suppressed the price of stock and whether retail investors could influence the price of a stock if majority of orders traded in the lit exchange.
While there was no direct answer to the suppression of price, the Chairman says that with so much trading happening off-exchange, he doesn’t think it’s a leveled playing field as “dark pools give institutions an unfair advantage.”
“Retail investors as individuals don’t have the power to move the markets, but retail orders combined could have significant price impact.”
High FTD reports can also point towards manipulation of AMC stock.
Yahoo Finance’s Jared Blikre says that when a stock makes it on the NYSE Threshold Securities List, it’s a strong indicator that the stock is being manipulated by naked shorts.
“When you short a stock, it has one or more days to clear. It depends on where you are historically. But sometimes there are fails to deliver, and a fail to deliver is when you don’t have the ability to prove that you borrowed the stock legally before you actually shorted it.”
Latest AMC Entertainment News
AMC broke a new weekend high record in 4 years as “Barbenheimer” produced results bigger than expected.
“Barbie” ended up with $162 million in its first weekend of release, above Sunday’s already record-breaking estimate of $155 million. The Warner Bros. film, starring Margot Robbie declined just 9% from Saturday to bring in $43.7 million on Sunday.
Those ticket sales rank as the biggest opening weekend of the year, besting “The Super Mario Bros. Movie” ($146 million).
“Barbie” also marks the biggest debut ever for a film directed by a woman, overtaking Anna Boden and Ryan Fleck’s 2019 blockbuster “Captain Marvel” ($153 million), says Variety.
“Oppenheimer,” also beat expectations with $82.4 million, slightly higher than Sunday’s huge $80.5 million projection.
At the international box office, Oppenheimer added $98 million for a global tally of $180 million.
“The box office powered to its fourth-biggest weekend in history with over $300 million industrywide.
The top three weekends of all time were led by the debuts of sequels in massive franchises — 2019’s “Avengers: Endgame” ($402 million collectively), 2018’s “Avengers: Infinity War” ($314 million collectively) and 2015’s “Star Wars: The Force Awakens” ($313 million collectively),” says Variety.
AMC Entertainment stock is up +25% this year-to-date and down more than -64% in the past year.
Read: AMC’s Hycroft Opens New Investigation Against Illegal Trading
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Frank, with the cost in the billions to short AMC, why are the amount of short shares on the rise and, who is profiting?
I feel the whole market is unbalanced in power and openly suppresses price to meet their needs. They may actually temporarily up the price to meet their needs. I don’t feel good about all the dark pools, naked shorts and on and on and the Americans that lost their life savings because of this. I feel our entire nation is going to crumble, trust is an issue and ethics are gone … Long gone. If anyone can explain the price dancing of AMC after hours on Monday. It will be too late to wake up to angry mobs and that is what is on the horizon.
Hi Frank,
I am looking at Ortex atm, and it shows the short score @ 93.
16,310,959 shares have been returned.
Tom
Returned after hours (probably).
Unbelievable SEC, nor Gary nor AA are doing something about this!! AA being silent and his APE “pounce” intro doesn’t give a good feeling neither… Think people should demonstrate on the streets or something ..
Unfortunately, things may escalate over time if justice is not served.
We’ve been hearing this for over 2 years. What’s going to change?
Leave your thoughts below!