AMC’s shares on loan have massively increased since its grand runup to $72 per share last year in June.
The movie theatre chain continues to be quite the attraction for retail investors as it is still heavily shorted.
The pandemic no longer threatens AMC Entertainment, and the company has improved drastically when it comes to fundamentals.
However, short sellers did not expect this to happen.
And now they’re stuck with millions of shares on loan that eventually have to be returned.
The results?
A short squeeze.
Let’s discuss it.
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AMC’ shares on loan reach 157.87 million
The shares on loan of a stock are the number of shares that have been borrowed and have yet to be returned.
We see this data when looking the short interest data of a ticker symbol to determine how much of the float is being shorted.
So, what does this mean?
AMC’s shares on loan essentially looks like debt to short sellers because they eventually have to return these shares back to the lender.
These shares amount to approximately 21.88% short interest (updated daily on the blog).
This is a very high short interest percentage – something mainstream media will not talk to investors about.
AMC’s short high short interest is what allowed it to reach $20 per share in January and $72 per share in June of last year.
Hedge funds lost billions, which is why mainstream media has focused on scaring retail investors out of their money by pumping out ‘DO NOT BUY AMC’ content.
Nothing has changed this year except AMC’s shares on loan and short interest keeps climbing.
AMC’s short interest was only at 20% when it surged to $72 – it’s now close to 22%.
Related: Free Live Daily Updates: AMC Short Interest Today
Is an AMC short squeeze on the horizon?
In recent articles I’ve said there is no better time to close short positions than today due to the bear rallies we’ve been having in the market.
The market has reached all-time lows providing short sellers with an incentive to close now before the market begins trending upwards again.
Unfortunately, new short sellers have jumped in on the hate bandwagon and are exposing themselves to very high risk.
Hedge funds have closed in the past year due to overleveraging their short positions in the market.
These are institutions who have lost billions of dollars and created major distress for real clients.
Individual short sellers should understand what they’re going up against when facing retail demand.
The fact is AMC Entertainment has the perfect short squeeze setup.
One can view short sellers as a nasty blackhead that needs to come out.
It’s there, it just has to get squeezed out.
Gross.
But you get the point.
AMC’s squeeze potential is big, it’s just a matter of when will it happen.
It’s very possible
If you’re an avid reader of my content, then you know all about executive order 14032.
Now, I don’t want to sound like a broken record player, but this could be a very big deal for AMC stock.
We saw this executive order play a very important role for AMC last year when it resulted in its January and May/June price runups.
The order is to go in effect on June 2nd, 2022.
And while the community doesn’t like to call out dates, expect something in June anyway.
Only you can control your emotions.
Optimistically, community members understand that whether executive order 14032 creates a massive impact or not, AMC is still a short squeeze play.
I’m interested to know what you think.
Leave your thoughts in the comment section of the blog below.
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Related: What's The Probability of AMC Squeezing in June?
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Hello Frank!
Thanks for your incredible engagement.
Question: from where do you have the information of 157 million short shares? For example ortex indicates only about 114 million short shares. I know, the numbers at ortex are directly delivered by the hedgies but your source seems to be better. Thanks for your efforts.
Almost 160 million shares on loan
As previously stated there is no way that SEC will allow the hedge funds to collapse. They will manipulate the market any which way they can to make sure that doesn’t happen. Luckily I don’t need the money I invested so I will continue to hold in the hope that I can recover my initial investment.
As soon as I cover I will sell and move on…
Do you have estimate of the qty of naked shorts (fake shares sold) that aren’t recorded as short sales? Overstock lawsuit identified over 107% of shares shorted, so your short positions may be very understated to actual number shorted. Some shorts don’t close their positions to avoid paying taxes and try to target stock to zero (Lucent and Diamond Offshore are 2 stocks I’ve owned that appear shorted to zero in past).
Let’s start a discussion! Leave your thoughts below.