AMC short sellers have suffered more than $1 billion in 2022.
We’ve recently seen AMC’s short interest tumble slightly; signifying hedge funds have either returned shares back to their lender or have begun closing their short positions.
S3 Partners, LLC confirms short sellers who closed their positions between January and July of 2022 have suffered more than $1 billion in realized losses.
So, while AMC’s drop in short interest does indeed signify some amount of short covering, it’s highly likely the return of shares on loan have also contributed to those numbers; based on AMC’s current share price, but more on that later.
Let’s go over the latest data and AMC updates.
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More than 1/5th of AMC shares have been sold short
AMC short sellers have lost $1.4 billion this year through July according to S3’s data.
AMC’s share price has been on the rise for a month straight now.
The movie theatre stock is up more than 24% on the monthly chart as movie enthusiasts continue to fill auditoriums across the globe.
Shareholders have also played a massive role in AMC Entertainment’s success.
The community known as ‘apes’ have been buying and holding the stock for over a year now, providing liquidity to the company and ensuring its success from one standpoint.
Will short sellers continue to bleed out?
With the rise of retail investors in this play and record-breaking titles coming to the big screen, there’s no doubt bulls are beginning to take over again.
Tracking AMC’s short interest
AMC’s short interest dropped from 23% to 18% in only a matter of a few weeks.
However, the share price only rose slightly from the $12 levels to the current peaks of $18.
I update AMC’s short interest every morning on the ‘Short Interest & Utilization‘ tab so be sure to bookmark it.
The last time we saw a major shift in short interest is when AMC’s short interest dropped from 23% to 14%; the share price surged from $14 to $72.
You can see why shareholders see a discrepancy.
The significant drop in short interest can also correspond to hedge funds returning shares back to their lender that were never used.
This is by far the best explanation for a sudden drop in short interest with only very little price movement, despite shorts losing more than $1 billion this year betting against the largest movie theatre chain in the world.
The return of shares could be signaling that hedge funds are rethinking shorting this play.
AMC Entertainment might just be shedding it’s ‘meme stock’ title as it further proves its strengths in the game.
Is bigger price action on the horizon for AMC stock?
Aside from AMC’s fundamental growth, there’s heavy speculation that a big bounce is nearing.
AMC CEO Adam Aron has hinted at an upcoming ‘pounce’ that will have a great impact in the markets, destroying short sellers and positively accommodating to its shareholders.
Fox Businesses’ Charles Gasparino says no CEO in history has ever done this, and even questions whether it’s legal to make such an announcement prior to earnings.
And while the CEO has not committed any violations in doing so, shareholders are waiting patiently to see what happens after Q2 earnings are announced.
I will be publishing the highlights on Franknez.com so be sure to join the newsletter so you don’t miss a thing.
Related: Was AMC's MOASS Just Confirmed?
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