AMC’s Cost to Borrow Has Hedge Funds Burning Money

AMC Cost to borrow
Market News: AMC’s cost to borrow increases

AMC’s cost to borrow continues to rise.

In the past, we’ve seen how important this data has been regarding major price runup.

Not only does a high cost to borrow incentivize short sellers to close their positions, but it gets AMC one step closer to a squeezing.

In this article I’m going to break down the number figures and explain why the CTB and other data is pointing AMC in the right direction.

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Cost To Borrow explained

The cost to borrow is the average annualized percent (%) of interest on loans hedge funds have to pay.

For example:

AMC has approximately 190.44 million shares on loan as of the publication of this article.

Hedge funds are paying 15.55% annually on these loans.

This translates to $29.6 million per year, or $2.46 million per month.

In the meantime, it’s costing retail investors $0 to hold their positions in AMC stock.

Hedge funds will continue to pay more as AMC’s cost to borrow rises.

Short interest

AMC short interest

AMC’s current short interest is: 22.41%.

This is the percent of a company’s free float that is shorted.

AMC is a short squeeze play because of this number figure.

This number figures tells retail investors that there is a high interest in shorting the company stock.

It’s this data that allowed retail investors to foresee big price moves in January and in June of 2021.

This same data tells investors today that AMC has the potential to hit another all-time high.

Some of you might be familiar with the correlations between short interest and rise to $72 per share last year.

AMC’s short interest dropped from 23% to 20%, then to 14% when it ultimately skyrocketed in price from $14 per share to $72 per share.

Despite what mainstream media has said in the past, no, AMC’s short interest is not too low to squeeze shorts from their positions.

Will AMC’s cost to borrow force shorts to close?

AMC short squeeze
AMC cost to borrow – AMC short squeeze

Hedge funds may be incentivized to close their short positions in AMC stock as the cost to borrow increases. At some point, it’s not worth paying that high of a fee to continue shorting a company that has fundamentally improved.

AMC is no longer the same endangered company it once was during the pandemic.

The company has improved every quarter since 2021 and has managed to get rid of most of its debt.

The world’s largest movie theatre continues to innovate and adapt to the changing world.

While online streaming threatened the industry, revenue from box office hits has proved people are still going to the movie theatres, despite the convenience of watching movies at home.

Short sellers are betting against a recovering and innovating film industry generating billions in revenue now.

As AMC continues to prove itself fundamentally and the cost to borrow rises, expect short sellers to begin closing their short positions.

Here is where patient investors will see massive returns.

Do you own AMC stock?

Are you an AMC shareholder or are thinking about buying AMC stock?

Leave a comment below.

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16 Comments

  1. Denise O’Neal

    700+ shares and holding the line apes!

  2. stevehoping

    Frank,
    I think your math (or mine) is off. Let’s take 190 million shares, multiply that by the stock price, then multiply that by the interest rate. 190,000,000 * $13 a share. Comes out to almost $2.5 billion. Now put a 15.55% interest rate on that amount and you have a yearly cost of $384 million, a monthly cost of $32 million or a daily cost of over $1 million. Unless I’m doing something wrong.

  3. Franklin

    11217 held with 26 year end contracts at values of .50 to 2.00. Been holding a couple hundred prior to 2021, as soon as I learned about dfv I plowed all I could round up in amc

  4. Ms Light

    I started picking up shares in March. I am up to 365 shares in one account with a $19.46 average. Another account I have 10 shares with a $12.55 average. I pick up a few every time I have some extra cash. I have loved getting into this!

  5. Andy

    4K shares since Feb ‘21 reporting in from Chicago, USA. Thank you Frank Nez for the honest reporting; it’s refreshing to see. My conviction remains 🍿

  6. Fireballrw

    So Frank teach us all if you know, What drives the cost to borrow up.

  7. Timothy St.

    Holding about 800 shares. 🚀

  8. Charles

    I have been an AMC shareholder since April of 2021. Bought shares on the dip many times. Will hold . I’m extremely confident that the squeeze is imminent. Not a question of if it happens. It’s going to happen. Do what’s best for you Ape 🦍 community.
    Carpe Diem

  9. Itshy

    Only 50 Shares from France since february 2021

    • Gorilla Grodd

      Nice to meet a fellow 50 share holder. We can all get together in the South of France 🙂

    • FireballRW

      At least you’re in my brother, If you can buy when you can.

  10. Ben121

    Just an average joe with little to no knowledge of stock markets. However, I have 450 shares of AMC from personal disposable income and very happy to join “ape” culture of holding and waiting this one out while hedge funds bleed

    • Fireballrw

      Like I said above at least your in and part of the family. IF you can buy when you can even its 1 share

  11. Frank Nez

    Let’s start a discussion! Leave your thoughts below.

    • Mike

      If more than 100 percent of available shares are owned and the Hedgies are borrowing ghost shares and dark pooling them, how can I purchase shares today and be sure that I own actual shares? Maybe a dumb question but I want to pull the trigger and buy a few shares to hold to the end and no almost nothing about stock trading. Any help appreciated

      • Brian T Johnson

        Doesnt matter whether they are real shares or synthetic shares. The hedge funds and market makers that sold them to you low, will have to buy all of them back, real or synthetic, when amc squeezes. Rest assured in this play.

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