Written by Tory Dickerson
In hindsight, AMC shareholders are eager to get what they deserve, the MOASS (mother of all short squeezes), to which they are lawfully owed. AMC is currently the most manipulated stock on the market, with its peak more than 120 million shares shorted.
Retail investors managed to use the biggest hedge funds’ recurring investment strategy to their own advantage. Short Selling.
Short shares explained
The average person will buy a stock in hopes that the stock will increase in price and the difference of when they buy and sell will be their profit. Similar to short selling, but only in reverse.
To do this, the trader will be granted a loan from a bank to ‘short’ the stock. They will then go on to borrow the shares with the loan they received, except they believe the stock will decline in price. If the stock does see a decrease in price, they will profit on the difference from where they borrowed to the current price.
Apes have rallied behind AMC during their road to bankruptcy to keep the business alive. Hedge funds like Citadel and Melvin Capital have lost more than 5 billion dollars trying to short the stock.
When a trader has not acted on buying the stock to pay back their loan plus the interest that was tacked, you would think the clearing house would demand their money back at some point.
FTD’s (failure to deliver) are set into place when a purchase is not complete. Hedge funds clearly have the money to pay back these loans, but they would suffer a 50% loss.
Naked shorting AMC
AMC FTDs are linked to the formation of synthetic shares and lack of management. These clearinghouses cannot process their orders due to these hedge funds not ‘owning’ these shares.
The shares they ‘borrowed’ are synthetics, naked shares. None of it is real, non-existent, complete manipulation of the market, it’s also highly illegal.
Most companies use this strategy when a business is going into bankruptcy, because once the business is no longer running, they can wash their hands and profit on the decline in stock price.
Obviously, AMC is no longer going into bankruptcy, due to the ape community.
After the market crash in 1930, The U.S. Securities and Exchange Commission was created as an independent agency to protect shareholders as well as national banks. So why isn’t the SEC doing anything on the very clear illegal activity happening in broad daylight?
The beginning of the end for AMC
The Federal Reserve uses FR Y-15 data to detect an on-going list of risk profiles on institutions that present high risk for acquisitions. These forms will contain all the collected structural data to confirm which global bank holding companies are set for systemic risks.
The Federal Reserve issued the Federal US Code Chapter 12, which audits the entire financial system, and stumbled upon Citadel Connect. Although Citadel Connect is not registered as an ATS, we can assume it is their own use of a dark pool. It does not report any of its volume trading to FINRA.
The Federal Reserve will be exposing the numbers along with the extensive banks and their lending clients on July 30th, at 4:15 pm.
Dark pools were originally created so large institutional orders do not show up on the exchange order book. This practice is used to obtain market stability, now it is all used for market manipulation. USC 12 validated that this has been in commission since 2019.
If the FR Y-15 connects a risk for financial institutions with more than $100 billion in total assets, then the FRB will retain the jurisdiction to make them sell off all high-risk assets until they are subsidized into a certain structure. Upon refusal, the FDIC will just do it themselves.
JP Morgan now plays a huge catalyst
Not wanting to experience an excessive amount of loss in capital, JP Morgan warns hedge funds of intraday margin calls. They can demand a margin call up to 7 times per day. By doing this they can ensure that hedge funds have the necessary cash by hand as collateral.
If they do not have value in cash they are owed, JP Morgan can instantaneously liquidate any overleveraged positions. This can begin to stimulate the squeeze apes have been patiently waiting for.
One could hope the recognition of JP Morgan taking strides in preventing an extreme loss, many other banks will start to do the same.
Will market crash?
Many are skeptical of a market crash, similar to what happened in 2008. Congress denied a bank bailout, all banks that had over leveraged positions were not able to have these written off. The Feds began to bail them out, governments were forced to supply liquidity for any frozen markets. This was linked to the falling in real estate.
Companies who were in business with the bank were affected and their stocks began to plummet. This was the catalyst to the whole stock market shifting downward. Bonds are currently offering a very low return rate, due to inflation on the interest rates rising. This puts pressure on both the stock market and real estate.
The common person is not interested in investing in the housing market. This leaves one option- the stock market. Leading everything back to the overleveraged positions on hedge funds. For them to not have a significant loss they have to continually pump money into the system to eventually cover their losses.
Now whatever is driving that force will eventually enter a liquidation phase causing a big correction in the market, known as a market crash. Market in the short term looks promising, however we can expect growth at a slower rate.
Lawmakers propose financial regulation on hedge funds
Lawmakers started to commence dozens of proposals on increasing financial regulation on hedge funds. This includes banning market makers and requiring them to release any short selling out to the public being performed on stocks.
The SEC will begin to analyze their trading in paying brokers to implement their orders. Lawmakers will begin to vote as early as next week on new proposals that will then have to go to the House for ratification.
Following AMC squeeze, the daily trader can long for an unmanipulated market. With new rules coming into play and more of a strict day to day report for hedge funds, we can expect less manipulation to occur.
Obviously, I am no financial advisor, but when you lay out the facts and numbers, it is currently the best time to get into AMC stock. With AMC expecting to be the biggest short squeeze in history, make some important decisions if you’re trying to get in before this thing skyrockets.
Written by Tory Dickerson
You can follow Tory on Twitter @_tdick_