AMC’s Rising Borrow Fee Is Big Trouble for Short Sellers
AMC Entertainment’s (NYSE:AMC) short borrow fee has risen to 244.40%.
This is the fee short sellers are paying annually to borrow short shares in efforts to suppress the stock’s share price from creating a short squeeze.
Short sellers could face serious losses as the movie theatre chain stock begins to move up in price again from retail buying pressure.
As hedge funds begin to play the long game and begin to buy the stock again, the reality for the short seller could be disastrous.
In 2021, AMC shareholders were able to move AMC’s share price from $2 per share to $20, and then from $9 per share to its all-time high of $72 per share based on momentum alone.
AMC retested the heavy demand zone at $6 per share and even retested above the $8 level in the beginning of 2023.
However, share prices have broken below these levels today.
Here are the latest AMC news and updates.
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AMC’s Rising Share Price Spells Trouble for Short Sellers
Retail investors continue to take on Wall Street in 2023 as long-term shareholders continue to buy and hold the world’s largest movie theatre chain stock.
#AMCSTOCK and #AMCSQUEEZE have been trending on Twitter for two years in a row now, signifying shareholders aren’t leaving.
After price rejection at $6 levels, AMC found itself trading above $7 per share having retested $8.32 earlier this year.
AMC’s short interest is already over 25% according to Ortex data, higher than the short interest it was before it began surging to its all-time high.
Retail investors have been waiting for AMC to trade above $100 per share since 2021 when it nearly reached those levels.
And with the extremely high short borrow fee rate, shareholders are waiting to see the stock’s price skyrocket again.
Short sellers betting against the movie theatre chain are no longer paying the 1% short borrow fee rate like they were last year.
According to Stonk-O-Tracker, hedge funds are currently facing a 244.40% short borrow fee rate to short AMC.
Also Read: How to Buy AMC Stock (2023 Guide)
It’s Getting Riskier to Short AMC
Experts are claiming that a recession could extend market volatility until around fall of 2023.
As the markets begin to hit the bottom, it poses greater risk to investors going short on the market.
At some point, the market has to come back up.
Many may face unprecedented losses hoping the markets will keep dropping when in fact we may experience a bounce.
Bull markets also tend to last a lot longer than bear markets which means all of this draw-down has only been temporary.
But I’m curious to know your thoughts on this.
Leave your thoughts in the comment section of the blog down below.
Related: How Big Could an AMC Short Squeeze Potential Surge?
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Show CommentsWe have been hearing this for 2 years. The corruption is too great. Who benefits from the fines being paid from the shorts?
🤔
First of all Amazon is not interested in AMC. They have their own movie Network They do not need anything. They have also said in the past that they will never do business with AMC. So someone on the AMC or eight board started that rumour just to get the stock going. That’s like Aurora cannabis partnering up with Coca-Cola which never happened and it was all rumours just to get the stock to ran. Don’t get sucked inrrun
Cannabis and Coca Cola doesn’t make sense. Amazon and AMC make much more sense. Who knows, this is insider talk after all. It was insiders who leaked Amazon investing in creating movie titles, which became official months after the ‘rumors’. Time will certainly tell if this even carries weight.
imo it was ftd clearing and another tue run ups to sell calls to fomo chasers
The best thing that could happen from this court case other than the Judge saying you can’t merger Ape with AMC it was all wrong , is the judge delay the case for a few more months . That would put a lot of pressure on the shorts at that high intrest rate.
🤔
Does it matter when the MMs keep creating synthetics?
Yes, because it may lead to a chain reaction of shorts closing.
Ok if I shorted a share las year say at 1%, does that interest rate change daily or does it stay the same depending when you shorted it?
Shorts at so screwed!!! They deserve everything they have cheated Retail out of!!!
Let’s start a discussion! Leave your thoughts below.