Category: AMC Stock (Page 1 of 73)

Notorious Short Seller Bill Hwang Now Faces Painful Testimony

Notorious short seller Bill Hwang now faces a painful testimony by his head trader who states the hedge fund manager encouraged illegal trading.

Bill Hwang’s top trader at Archegos Capital Management gave damning testimony against the boss, telling a jury Hwang told him to do “the opposite” of what a “normal fund” would.

William Tomita took the stand Monday for what’s expected to be several days of testimony as the prosecution’s star witnesses in a criminal case against Hwang over the spectacular implosion of Archegos in 2021, reports Bloomberg.

He immediately admitted committing “financial crimes, namely market manipulation and lying to banks,” then implicated Hwang.

“I was directed to do so by my former boss,” Tomita said, identifying Hwang in court.

Of the major witnesses, Tomita worked most directly with Hwang himself and is therefore key to connecting the Archegos founder to the charged conduct.

Tomita said Hwang told his traders to use tactics that would maximize the effect on share prices, rather than gradually building their positions at the lowest cost and trying to minimize the impact of their own trading on the market.

At Archegos, Tomita said, he could see the effect of the volume of the firm’s trades versus others and knew he was moving the market. “I could see that it was me that generated the stock price,” he testified.

Hwang and his co-defendant, former Chief Financial Officer Patrick Halligan, have pleaded not guilty and are in the fifth week of testimony against them in their trial in lower Manhattan.

Hwang’s legal team claims he used multiple counterparties to minimize risk, not to improperly maximize leverage or conceal the nature of their trading as the government contends.

Halligan, the CFO, had no role in trading but is charged in connection with Archegos’ alleged lies to bank counterparties.

However, another key government witness, former chief risk officer Scott Becker, has already told the jury he duped banks into believing the firm’s positions were far less risky than they were.

In the end, Archegos’ meltdown would cost banks including Morgan Stanley $10 billion and help bring down Credit Suisse Group AG.

Tomita, who handled the trading on which the case against his former boss turns, provided a window into the tactics that catapulted Hwang’s fortune from $1.5 billion to $36 billion in the year before the firm’s collapse.

Stock market manipulation on Wall Street has gained more attention since the ‘meme stock’ frenzy of 2021.

The question now is, what are our regulators going to do about it?

Also Read: Massive Banks Are Now Getting Fined For Illegal Short Selling

Other Stock Market News Today

Market News Today - Notorious Short Seller Bill Hwang Now Faces Painful Testimony.
Market News Today – Notorious Short Seller Bill Hwang Now Faces Painful Testimony.

South Korea now finds banks pursued an illegal shorting scheme, uncovering a whopping $211.2 billion won ($156m), in manipulative trades.

South Korea’s financial watchdog said it has so far uncovered 211.2 billion won ($156 million) worth of illegal short trades by nine global investment banks, providing its latest formal update on a probe that began late last year, per Bloomberg.

The nine banks, whose names weren’t disclosed, violated mostly procedural rules while collectively shorting 164 stocks, according to a briefing given by the Financial Supervisory Service.

It is continuing to probe five other banks in the matter.

Two of the nine banks are already facing penalties imposed by the financial authorities and have been referred to prosecutors for further investigation for allegedly violating the nation’s capital markets law, Hahm Yong-il, senior deputy governor at the FSS, told reporters Friday.

The watchdog plans to review penalties on the other seven banks.

Activities of global banks and hedge funds have come under increased scrutiny in recent months in South Korea, as authorities boost steps to weed out naked short selling — a practice of selling shares without even borrowing them first.

While short selling remains legal in many markets, it is a contentious political issue in the emerging Asian nation, with its powerful retail investors often blaming it for stock declines, reports Bloomberg.

“The FSS found that the violation rate exceeded 20% in some cases, which suggests that illegal transactions have a big impact on a certain stock,” the financial regulator said in a statement earlier this year.

“It’s necessary to consider the impact of illegal short sales on an individual stock as such trades hinder fair pricing and increase short-term volatility,” it said.

Bloomberg reports the South Korea’s financial watchdogs derived the 20% figure by dividing the amount of violated orders on a certain stock by its daily trading value.

The FSS did not identify the equities that saw illegal trades and declined to say how frequently the trades exceeded that ratio.

In November, South Korea imposed a ban on short selling through mid-2024, a decision that drew big celebration from retail investors in the country.

Investors in the AMCMULNGTIIFNGR, and MMTLP communities are just a few of many who have been raising awareness of the malpractice happening in the U.S stock market via X.

Market News Today – South Korea Now Finds Banks Pursued Illegal Shorting Scheme.

Also Read: SEC Commissioner Now Says Securities Lending Facilitates Illegal Trading

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Market News Today - Notorious Short Seller Bill Hwang Now Faces Painful Testimony.
Market News Today – Notorious Short Seller Bill Hwang Now Faces Painful Testimony.

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GameStop Short Sellers Now Down A Whopping $1 Billion

GameStop short sellers are now down a whopping $1 billion in May according to new data from S3 Partners analysts.

Shares of the gaming company soared more than 66% on Monday, hitting nearly $37 from a previous close of $17.39.

GME stock is currently up more than 183% in the past month alone.

Media speculates GameStop shares rose due to the return of iconic investor, Keith Gill, AKA Roaring Kitty.

Shares of AMC Entertainment stock also rose by more than 50% on Monday, hitting $4.44 from its previous close of $2.95.

The movie theatre stock is currently up 79% in the past month alone.

According to financial analytics firm, S3 Partners, GameStop short sellers have accumulated approximately $1 billion in paper losses.

“GameStop shorts are down in estimated $1 billion in May paper losses with todays +50% pop in early trading,” said Matthew Unterman on X.

“@S3Partners multi-factor squeeze risk score has been registering a max of 100 every day since May 3rd.”

S3’s Squeeze Score overlays the significant components for a squeeze, higher financing costs and unrealized losses, to their Crowded Score to identify shorted stocks with higher short-side volatility and identifies stocks that have the necessary conditions to be “squeezed”.

Squeeze Scores of 70-100 identify squeezable stocks, and scores over 90 have a significantly higher risk of a squeeze and the potential for the resulting buy-to-covers to pushing stock prices even higher, according to the companies website.

With Roaring Kitty back, does this mean meme stocks are about to blow up again based on hype and momentum again?

I’d love to hear your thoughts on this. Leave a comment down below.

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Also Read: South Korea Now Finds Banks Pursued Illegal Shorting Scheme

Market News Published Daily 📰

Market News Today - GameStop Short Sellers Now Down A Whopping $1 Billion.
Market News Today – GameStop Short Sellers Now Down A Whopping $1 Billion.

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South Korea Now Finds Banks Pursued Illegal Shorting Scheme

South Korea now finds banks pursued an illegal shorting scheme, uncovering a whopping $211.2 billion won ($156m), in manipulative trades.

South Korea’s financial watchdog said it has so far uncovered 211.2 billion won ($156 million) worth of illegal short trades by nine global investment banks, providing its latest formal update on a probe that began late last year, per Bloomberg.

The nine banks, whose names weren’t disclosed, violated mostly procedural rules while collectively shorting 164 stocks, according to a briefing given by the Financial Supervisory Service.

It is continuing to probe five other banks in the matter.

Two of the nine banks are already facing penalties imposed by the financial authorities and have been referred to prosecutors for further investigation for allegedly violating the nation’s capital markets law, Hahm Yong-il, senior deputy governor at the FSS, told reporters Friday.

The watchdog plans to review penalties on the other seven banks.

Activities of global banks and hedge funds have come under increased scrutiny in recent months in South Korea, as authorities boost steps to weed out naked short selling — a practice of selling shares without even borrowing them first.

While short selling remains legal in many markets, it is a contentious political issue in the emerging Asian nation, with its powerful retail investors often blaming it for stock declines, reports Bloomberg.

“The FSS found that the violation rate exceeded 20% in some cases, which suggests that illegal transactions have a big impact on a certain stock,” the financial regulator said in a statement earlier this year.

“It’s necessary to consider the impact of illegal short sales on an individual stock as such trades hinder fair pricing and increase short-term volatility,” it said.

Bloomberg reports the South Korea’s financial watchdogs derived the 20% figure by dividing the amount of violated orders on a certain stock by its daily trading value.

The FSS did not identify the equities that saw illegal trades and declined to say how frequently the trades exceeded that ratio.

In November, South Korea imposed a ban on short selling through mid-2024, a decision that drew big celebration from retail investors in the country.

Investors in the AMCMULNGTIIFNGR, and MMTLP communities are just a few of many who have been raising awareness of the malpractice happening in the U.S stock market via X.

Market News Today – South Korea Now Finds Banks Pursued Illegal Shorting Scheme.

Also Read: SEC Commissioner Now Says Securities Lending Facilitates Illegal Trading

Market News Published Daily 📰

Market News Today - South Korea Now Finds Banks Pursued Illegal Shorting Scheme.
Market News Today – South Korea Now Finds Banks Pursued Illegal Shorting Scheme.

Don’t forget to opt-in for push notifications so you don’t miss a single article!

Also, thank you to all of our blog sponsors.

This year we’ve been able to increase push notifications slots making it more convenient than ever for new readers to receive their daily market news and updates.

Scroll below to view my stock purchases this month!

You can also follow me on X (Twitter)InstagramFacebook, or LinkedIn for daily news and updates on your favorite stories.


Frank Nez’s Stock Portfolio

Wondering which stocks Frank Nez is holding? Which stocks is Frank Nez buying?

Frank Nez is now sharing his exclusive and personal stock portfolio with readers, only on the Patreon.

11/16/2023 – Today I invested $1,000 in two different stocks for a brand new stock dividend portfolio I am creating for 2024.



Citi, Goldman, Extend AMC’s Covenant Waiver to 2024: What it Means

CEO Adam Aron said Citi, Goldman Sachs, and Credit Suisse have extended AMC’s covenant waiver to March 31st of 2024.

“This is a reflection of AMC’s recovery being well under way… a vote of confidence in AMC by our banks that we much welcome. Thank you Citi, Goldman, and Credit Suisse”, said AMC Entertainment (NYSE:AMC) CEO Adam Aron in January of 2023.

So, what exactly is a covenant waiver extension and what does this mean for AMC Entertainment?

What is a Covenant Waiver?

A covenant waiver is when a lender temporarily forgives a borrower’s breach of a loan covenant.

In AMC’s case, the lenders are Citi, Goldman Sachs, and Credit Suisse.

Debt covenants are restrictions that lenders (creditors, debt holders, investors) put on lending agreements to limit the actions of the borrower (debtor), AMC Entertainment.

In other words, debt covenants are agreements between a company (AMC) and its lenders (Citi, Goldman, Credit Suisse) that the company will operate within certain rules set by the lenders.

Should a borrower violate a covenant, such as not maintaining a certain interest coverage ratio or engaging in unpermitted business activities, it may constitute a loan default, per The Balance.

Financial Covenants Explained

Covenant requirements are conditions the borrower must regularly meet throughout the term to demonstrate their creditworthiness to the lender.

Lenders frequently use certain financial tests that serve as indicators of the borrower’s repayment ability.

Failure to meet these tests violates the covenant and constitutes loan default.

In AMC Entertainment’s case, lenders have waived, or forgiven AMC’s breach of contract, per their loan covenant and extended it to March 31st 2024.

What Does This Mean for AMC Entertainment?

AMC News Today.
AMC News today.

For AMC Entertainment, a covenant waiver will allow the business to run operations under its debt contracts with Citi, Goldman Sachs, and Credit Suisse until 2024.

If the company fails to meet its debt obligations, or financial covenant requirements, then the loans are subject to default.

This puts AMC Entertainment in a tricky position in terms of what they can and cannot do or say.

Which also explains why the CEO cannot raise awareness of the manipulative shorting of the company stock.

It’s very likely that speaking out on such topics may violate these covenant agreements.

Some retail investors have scrutinized Adam Aron for not speaking out on naked shorts like other CEO’s are doing today.

But this news may provide shareholders with more perspective on why that is.

Is AMC Entertainment Being Held Hostage by Lenders?

Citigroup currently holds call options representing 0 of underlying shares valued at $0 USD and put options representing 55,000 of underlying shares valued at $383,000 USD.

Source: Fintel.

The bank has been selling shares while playing put options in order to profit from the drops they’re triggering in the market.

On November 7th, 2022, Citigroup dropped AMC’s price target from $3.13 per share to $1.20 per share and used the media to promote the price target.

Just a month prior to Citi’s price hit, Credit Suisse said in October AMC shares are worth less than $1.

The banks are making their money which means it’s going to be up to the company and shareholders to prove the Wall Street short thesis wrong.

But I’m interested in hearing your thoughts.

Leave a comment down below.

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