AMC’s Rising Borrow Fee Rate Spells Trouble for Short Sellers

AMC’s short borrow fee has risen to 96.3%.

This is the fee hedge funds 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.

Last year 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 has come down to retest the heavy demand zone at $6 per share during today’s bear market and has recently retested above the $8 level.

Here’s the latest AMC stock news.

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AMC’s Rising Share Price Spells Trouble for Hedge Funds Going Short

Retail investors continue to take on Wall Street in 2022 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 finds itself trading above $7 per share having retested $8.32 in the past week.

Today, AMC shares are up +15.41% in the past month and up +22.13% on the week.

AMC’s short interest is nearing 20%, the same 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 last year when it almost went up to those levels.

But with the extremely high short borrow fee rate, shareholders are preparing to see the stock’s price skyrocket again.

Also Read: Shareholders Are Preparing for An AMC Short Squeeze

Hedge funds short on the movie theatre chain are no longer paying the 1% short borrow fee rate like earlier this year.

According to Stonk-O-Tracker, hedge funds are currently facing a 96.3% short borrow fee rate to short AMC.

The fee rose by 30% overnight from the previous trading day.

It’s Getting Riskier to Short AMC

We’re seeing the S&P 500 reclaim gains it lost during this year’s bear market with bulls anticipating the market has hit the bottom.

If this is the case, we may begin to see more buyer’s confidence entering the market as stocks begin to rebound.

This in turn creates greater risk to institutions and individuals going short.

And while claiming a bottom was met is still not yet certain, we know stocks don’t tend to go down forever.

Bull markets also tend to last longer than bear markets which means all of this draw-down has only been temporary.

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