AMC Stock Is No Longer Skyrocketing To The Moon

AMC Astronaut
AMC To The Moon

AMC is no longer going to the moon. It’s skyrocketing past Pluto. Today marks the 12th consecutive trading day AMC remains on the NYSE’s threshold list. If you don’t know what this means I’ll explain a little later.

As for short sellers, they continue to lose millions with each passing day as they continue to overleverage their positions in AMC stock. By amplifying their losses through debt, they’re also amplifying unlimited gains for retail investors.

Retail investors must continue to buy and hold the stock if they are to squeeze shorts out of their positions. Ladies and gentlemen, the movement is getting bigger and this is huge.

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AMC goes mainstream

In a recent interview with Joe Rogan, Adam Curry expresses his concern with the market manipulation in both GME and AMC stock.

“We know that you’re cheating on these companies like GameStop and AMC, etc., you’re cheating – you have a lot of shares that you say you have but they’re not really in the system, so we’re going to show you and we’re going to f*you by buying all the shares that are available so your short position goes through the roof..”

“This game is over” – Adam Curry with Joe Rogan

Expansion beyond the community

Word has gotten out of all that has been occurring with AMC Entertainment stock. Our DD is no longer just within our community, word is now getting around to several platforms.

These outlets are going to be bringing in new retail investors who will further accelerate the push that will trigger a short squeeze. AMC is now hitting the momentum it needs in order to close this chapter of our lives.

The waiting chapter that is. The celebration will drag on for many months and I cannot wait for that experience in the community.

Why the threshold security matters

Lets look at we can learn from GameStop before it began squeezing. GME stock began its ascend about a month and a half after getting listed on the NYSE threshold security some time in October.

What this outlines is simply that GME did begin to see massive gains after the threshold security fiasco. And as we know, history tends to repeat itself. We can further predict that AMC will too experience some sort of major price action once this has passed.

What is the threshold security supposed to do?

Companies make it on this list when they’ve had 5 consecutive days of fails-to-deliver. Fails-to-deliver are basically call options expiring the money that were never exercised, or executed.

Retail investors purchase premiums known as ‘calls’ and bet on the price of a share to rise. If the price of a stock is in the pocket of their projected share price, their bulk order of shares goes through at a discount.

So how is this important to AMC? Well, the threshold security states that if a company is on this list for 13 consecutive days then brokers must buy back all of the FTDs. Once these orders are closed the price of AMC stock is going to surge.

Now, if things work as they should, this momentum could trigger gamma squeezes inevitably leading to squeezing shorts out of their positions.

Why is AMC stock going down?

Short sellers are overleveraging their short positions with an insane amount of debt. This down trending consolidation is a result of heavy shorting in the stock combined with retail investors holding their positions.

AMC short shares available

Today alone we’ve seen 1.2 million short shares have been made available for short sellers to borrow. Hedge fund affiliate partners such as The Fool and MarketWatch can no longer sweep this information under the rug.

AMC Entertainment stock is the biggest stock in the market right now. It’s only going to be a matter of time before short sellers run out of borrowed shares and AMC stock continues its upward trend.

Are shorts trying to cover?

You might be asking yourself, why do hedge funds keep overleveraging their positions to insane amounts? I mean bankruptcy is no longer on the table for AMC Entertainment. There’s absolutely no way they can diminish this company now so what’s the deal?

Volkswagen Short Squeeze Chart

Lets looks at the Volkswagen short squeeze for just a moment. Volkswagen began to make a massive bull run before ultimately crashing back down beneath $30 allowing shorts to take the opportunity and close out their positions. In doing so the stock skyrocketed.

The Volkswagen drop was a massive loss on paper for most retail investors. Soon after this dip is when the stock experienced this short squeeze. Now the reason why TA’s (technical analysts) believe AMC’s short squeeze will be bigger is due to the incredible amount of overleveraging that has taken place during the course of several months.

How low will AMC stock go before shorts cover?

Now that’s the question. If we continue to see AMC’s stock price plunge due to the infinite amount of short shares being borrowed to drive the stock price down, when will shorts cover?

AMC stock 2016

Prior to the pandemic, AMC stock topped at around $35.30 back in December of 2016. It has been shorted ever since. This leads me to believe that this price point could very well be the highest level where short sellers break even.

Of course not every short seller started shorting at the top. But it’s safe to assume that most short sellers are willing to close out their positions in a price point where they can either break even or minimize their losses.

If shorts don’t cover at these levels, momentum will surge due to the discount forcing shorts to cover before the price rises again. Community, a short squeeze is inevitable.

Will you be able to stomach this drop?

These red days haven’t been fun to watch. But they haven’t been emotional either. At least not for majority of the AMC community which consists more of seasoned apes than new retail investors.

Here is where your conviction is truly tested. Traders have made their money right before the commencing of a short squeeze and that’s all find and dandy and what not. But will you be part of the bigger group that will hold this stock until shorts are squeezed out of their positions?

I can tell you I am. But the choice is yours and only yours to make.

Read: An excellent AMC exit strategy guide: Short squeeze

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9 Comments

  1. Ellery

    Wondering how they are no longer on the list?!

  2. Butch

    I was just reading the Regulation SHO Threshold Security List and to my surprise AMC is not listed today is there a little bit of a delay or is there some chicanery going on?

  3. Sven

    Great article!! thanks a lot for sharing this information and not the same shit like the FUD of the MSM
    Much appreciated

    • Frank Nez

      Thanks for reading Sven šŸ¤

  4. Dylan

    I hope you receive more “notoriety” in the coming days because you’ve always written good articles on AMC/GME. Cheers!

  5. Shannon

    Thanks for articles like this. Iā€™m new to the trading game and trying to learn as much as I can, days like today make me nervous bit reading your articles helps me relax and keep on holding!

    • Frank Nez

      The community keeps one another up Shannon – thanks for reading šŸ¤

  6. Roderick Robinson

    As a totally green new investor Iā€™m loving these red days, I like discounts. Almost to 65 shares with my average price at 50. I see it as my savings account for now. Love your blog, learning about the technicals and psychology at a level my ape brain can get while remaining pumped.

    • Frank Nez

      What I love most about the community Roderick is how we’re always learning something new every day. Thanks for being here brother šŸ¤

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