I am very excited to touch base on the topic of online business vs traditional business.
My family has owned a traditional business for about 13 years now.
That’s where I was first introduced to the sales world straight out of college.
Extended family such as uncles and cousins also have their own traditional businesses.
I am the only one in the family building an online business and have created a total of 3 online startups.
I’m a fan of both but favor one more than the other.
Let’s talk about the pros and cons of both an online business and a traditional business.
We’re going to dive in on the costs to start one, scalability, time to earn money, and flexibility.
Welcome to Franknez.com – the blog where you can digest content on personal finance, side hustle ideas, entrepreneurship, and trending investing topics.
Lets get started!
The first time I had an entrepreneurial moment was when I was a kid.
I didn’t know it then, but I know it now.
My grandmother had given me a few bucks and I had bought a variety of candy.
I then found a small clear plastic box where I combined all the candy together.
I remember going around the household charging $1 for a few pieces of starburst, skittles, and sour ropes.
I’ll never forget it.
I don’t know why I did it.
The instinct of opportunity perhaps?
Having been heavily involved in both, I understand the differences between a traditional company and an online business.
Let’s start with the costs to start one.
How much does it cost to start an online business?
Starting an online business is a lot more cost efficient than starting a traditional business.
With an online business your startup costs are a website, domain, email, and any additional widgets you choose for your website.
This can run anywhere from $200-$500.
In some cases you can accomplish this for less.
But if you’re paying someone to design your website it can cost between $1,000-$5,000.
Simply because it’s cost efficient and super easy to use.
Bluehost is integrated with WordPress and works well with any type of online business.
It’s $2.95/mo. and your domain is free your first year.
How much does it cost to start a traditional business?
In most cases, a traditional business is going to require you to raise more capital.
If your company uses any sort of machinery combined with software, the costs are going to be quite high.
The startup cost of a traditional company can range from $10,000-$40,000+.
A traditional business also needs to be registered in your county and requires a sellers permit if you intend in selling a service or product.
You might also have to buy small business insurance to cover any possible damages.
Like an online business, your traditional company will still need a functioning website to attract your customers to your service or product.
Startup costs of an online business vs a traditional business
When looking at the costs of a startup, an online business wins vs the traditional business.
A traditional business is nowhere as cost efficient.
This is the pro to an online business and con to a traditional company.
An online business will have very little to no overhead while a traditional business may have a massive overhead.
Scalable business model: Online vs traditional
The scalability of both an online business and traditional business is very different.
This is where a huge separation can take place.
Scalability with an online business
Because an online business is global, it can reach a global audience.
An online business can sell products online internationally and produce content that reach an audience at massive scale.
Online businesses with a lot of traffic have an advantage over a traditional business.
An online business can profit from:
Online product sales / service sales
Affiliate programs
Advertisement display
Blogging
Monetizing content via video
An online business can create a loop that drives traffic essentially multiple streams of income online.
A monetized YouTube channel can draw traffic to a monetized blog displaying ads.
A blog may also contain affiliate links that collect commissions.
Not to mention whatever this website has to sell or offer via its business model.
This multiple stream of income loop allows an online business to constantly be earning money, 24/7.
Scalability with a traditional business
A traditional business will always be limited by a demand for your service or product.
This type of business is usually limited by its location as well.
Most small businesses cater to their surrounding area and tend to expand outward with time.
What limits business owners with a traditional business is their growing overhead as their business scales.
When a traditional business scales new employees must be hired, more money has to be spent on payroll and other possible discrepancies that are human nature.
Lawsuits, raises, insurance, etc.
Although scaling a traditional business can be very rewarding, the responsibilities at this level compound as well.
The costs to run a traditional business when scaled go up and your business may become stagnant due to the increase in cost of goods and minimum wage.
A traditional business cannot scale without the addition of new employees and increase in sales.
An online business on the other hand requires traffic, or an audience which has no limit.
More on Scalability
Small businesses can learn valuable lessons from larger enterprises regarding sustainable growth strategies.
Large enterprises often emphasize efficient resource allocation, customer relationship management, and diversification of revenue streams.
These principles can be adapted to fit the scale of smaller startups, helping them make informed decisions and optimize their growth trajectory.
This software streamlines equity distribution, facilitates communication with shareholders, and ensures compliance with regulatory requirements.
Small businesses can also benefit from this practice, albeit on a smaller scale.
Implementing equity management tools can help startups manage equity distribution transparently, attract investors with clear ownership structures, and mitigate future complications.
How much time does it takes to make money from a startup?
The amount of time it takes an online business to earn money is also very different from the time it takes a traditional business.
Here is where a traditional business has the advantage.
How long does it take for an online business to make money?
An online business can take quite some time to make money. I would refer to this disadvantage as a con.
An online business takes time to monetize, especially if you’re not selling a service or product per say.
Even so, selling a service or product online takes brand building and brand recognition.
This is just as competitive as a brick and mortar if not more challenging.
I monetized my online business the first month of it going live but didn’t start making any ‘rent money’ until after a year of non-stop dedication.
I would work on building it after my 9-5.
Now I work on my online business full-time providing value to different online communities.
Now, I wasn’t selling a service or product so this does not mean it’s going to take you over a year to make money from an online business.
My online business revolves around advertising displays and affiliate programs.
You may have an outstanding pre-launch that enables you to earn money your first month or two in.
How long does it take a traditional business to make money?
If you have a product or service that’s in demand, your business can begin earning sales revenue in just days to weeks.
Landscaping and mobile car wash detailing businesses just have to knock at peoples doors.
Someone will schedule you.
I know people in these businesses that started earning money right away.
If you know who to target, your traditional business can start earning sales revenue fairly quickly.
Even if it’s just to break even.
While most businesses don’t profit until their second or third year in business, those tackling it hard may profit their first year.
Running an online business often times requires you to be tech savvy and marketing oriented.
These skills take time to build which means earning money online may take more time for new entrepreneurs.
Flexibility: Online business vs traditional business
Flexibility is a deal breaker for most entrepreneurs.
The flexibility an online business provides is way different from that of a traditional business.
The flexibility you have as a business owner with a traditional business is almost non existent.
Let’s dive into it.
Online business flexibility
With an online business you have the flexibility to work from anywhere in the world.
Most online business owners work from home and tend to work on their business while they travel once they’ve figured out how to scale.
This flexibility makes an online business such an attractive business model to most younger entrepreneurs.
An online business allows you to earn money while you’re on the road with absolutely no overhead.
Some online businesses do have teams of intrapreneurs growing the business, but even this small team does not compare to the amount of employees a traditional business needs in order to scale.
Traditional business flexibility
A traditional business on the other side has very limited flexibility.
Most business owners cannot manage their business on travel.
And if they do, they don’t truly get to relax due to the amount of physical responsibility they’re leaving behind.
Unless you’ve hired a great management team that can take care of business while you’re out, your business requires you to become a worker yourself within your own business.
In a lot of cases, entrepreneurs who fail to build a team end up becoming a slave to their own business.
This is essentially when time off is almost impossible.
Online business pros
Startups are more cost efficient
Scalability is limitless
Provides the flexibility to travel and work from anywhere in the world
Allows for multiple streams of income to loop with one another
Ability to earn passive income 24/7
Cons
ROI takes longer to receive in most cases
Traditional business pros
ROI may be quicker than an online business
Brick and mortar companies attract a local community
Cons
Startup costs require building capital in most cases
Flexibility is severely disrupted
Scalability is also limited compared to an online business
Which business model is right for you?
Figuring out which business model is right for you will determine on what you value most.
If you value your time and flexibility than an online business is tailored for you.
If you don’t mind a traditional business model for the sake of a simpler and offline experience, then go all in.
Both an online business and traditional company are going to allow you to earn a lot of money.
Each model will provide a unique lifestyle that is tailored just for you.
And it’s up to you to find out what type of lifestyle you would like to get from it.
Is it the laptop and travel lifestyle or is it the tangible business owner lifestyle?
I favor the online business model.
Most of my family favors the traditional business model.
But I think it’s because they’re significantly older, too.
Is there a hybrid business model of online and traditional?
Of course.
There are many businesses who implement both business models in order to diversify the way they connect with their customers and audience.
If you have a traditional brick and mortar and are looking to scale it online you can certainly do so.
You can do this by starting a blog on your niche industry or publishing YouTube videos online.
You would then need to monetize your content with advertisement.
This hybrid business model will allow you to run your traditional business as you have while earning passive income when your company is closed through the content you publish online.
Hybrid model with a blog
If your plumbing company is doing well but becoming a little stagnant, you can always write about your experience as a business owner in this industry via a blog.
My beginners guide walks you step by step how to accomplish this.
In this article, we’re going to go over some of the latest developments in AMC, it’s history since redditors took over, and an AMC short squeeze update for the year of 2023.
AMC keeps on keeping on, and although AMC has been on discount recently, retail investors continue to buy and hold it.
Retail investors remain excited about the data that has been collected for years now.
Will we see an AMC short squeeze while we continue to ride today’s bear market?
And if so, how soon?
Welcome to Franknez.com – the blog providing you with content on stocks, crypto, and market news. Today we’re discussing AMC Entertainment stock and its short squeeze update and history.
Lets get started!
How soon will we see an AMC short squeeze?
Retail investors all want to know.
Is it this week?
Will it be next week?
Or, are we looking at a longer game here?
Here’s what we know.
Key Highlights
AMC closed at $3.68 on August 15th. The stock continues to be heavily shorted. AMC Entertainment is set up for a short squeeze despite its split.
Shareholders continue to buy and hold the stock.
AMC’s short interest data shows us the stock has the perfect setup for a short squeeze.
Below is a series of documented facts and positive news that all influence AMC’s potential towards a short squeeze.
“Since reopening our first theatres with AMC Safe & Clean in August, AMC has welcomed back nearly 10 million moviegoers nationwide without a single reported case of COVID-19 transmission among moviegoers at our theatres. We look forward to welcoming back our New York City guests to the big seats, big sounds and big screens that are only possible at a movie theatre.”
Adam aron, President and CEO of AMC Entertainment
For those who thought AMC was a dead company, think again.
The company is now generating big revenue since it’s reopening and has beat every quarter since 2021.
Today, AMC shareholders have saved the movie theatre company again after two major proposals were finally passed following an exhausting lawsuit.
A reverse stock split and conversion of APE shares to common stock will now go into effect later this August.
AMC’s 1-for-10 reverse stock split will go into effect on Thursday, August 24.
The conversion of APE shares into AMC common stock will occur the following day, Friday August 25.
The litigation settlement will then take place on Monday, August 28.
CEO Adam Aron says these dilutive proposals will help AMC Entertainment raise plenty of cash to survive another catastrophic event.
Similarly, Anchorage Capital also closed its doors after betting against AMC stock.
Here’s why this matters:
Hedge funds who try to go against the retail wave will get burned
This is a huge win for retail investors over ‘smart money’ Wall Street
Unless shorts close their positions, hedge funds may suffer big consequences again
Today’s borrow fee rates are higher than they were in 2021 when AMC surged to $72 per share
An AMC short squeeze might be closer than we think
There are a few things retail investors did in 2021 to trigger massive price action:
They held their positions during the ups and downs
Shareholders purchased the dips
Investors shared information relating to a short squeeze (such as this article, 2021) to raise awareness
Kept tabs on charts to know when to buy (during drawdowns)
The incredible thing is 93% of market participants said they will still hold AMC stock in 2023 for a short squeeze.
Will Shorts Cover in 2023?
AMC Entertainment answered questions on short sellers covering prior to its newly approved conversion proposal.
Shares of the company fell more than -30% after hours on Friday as APE shares rose +30%.
On Monday, AMC stock is down more than -33% while APE is up nearly +18%.
Will short sellers be required to cover their positions before the Reverse Stock Split and Conversion?
According to AMC’s new 8-K filing, AMC expects that the deliveries under stock borrowing arrangements will be adjusted in the regular way to account for the Reverse Stock Split or, in the case of contracts on APEs, the Conversion.
However, AMC states that it “does not determine and is unable to provide interpretive advice on the impact of these events on the contractual terms governing stock borrowing arrangements.”
How will short sellers be affected by the Litigation Settlement Payment?
“AMC does not determine and is unable to provide interpretive advice on the impact of the Litigation Settlement Payment on the contractual terms governing stock borrowing arrangements.”
AMC’s reverse stock split will go into effect on Thursday, August 24.
The conversion of APE shares into AMC common stock will occur the following day, Friday August 25.
The litigation settlement will then take place on Monday, August 28.
Will there be large failure-to-deliver (“FTDs”) like when the APE was distributed?
AMC Entertainment states that while they cannot predict the trading impact of these corporate events, given the significant transactions that will occur over successive trading days, it is possible there will be large FTDs like when the APE was distributed.
Looking Back at the Events Prior to AMC’s Short Squeeze in 2021
Adam Aron gives positive news on AMC Entertainment – Archive 2021
AMC Entertainment has raised more than 2.2 billion dollars in cash
90% of AMC theaters in the United States are now open with New York and Los Angeles finally reopening
Vaccinations and policies are making movie theaters safe
New movie titles are guaranteed to increase sales revenues
CEO and President Adam Aron expresses an optimistic future for AMC Entertainment
AMC Entertainment has implemented a Safe & Clean program under the advisement from Harvard University’s prestigious School of Public health as well as well as the No. 1 U.S. cleaning brand, The Clorox Company. This means movie goers can now return at ease knowing a proper sanitation program has been put in place.
Hedge fund affiliate partners such as MarketWatch, The Fool, and other finance website tried to redirect the public from investing in AMC stock while the company was finally reporting positive news.
That’s primarily because hedge funds were losing so much money daily as share prices continued to rise.
A short squeeze became the ultimate threat to hedge funds with massive bets towards the downside.
Today, AMC Entertainment is in a whole other world compared to where it started in 2021.
Is AMC Shorted?
AMC’s current short interest is around 27.76%, which is much higher than it was when AMC shares skyrocketed to $72.
As of 8/15, we’re seeing 200,000 shares have been made available to borrow, via Stonk-O-Tracker.
While shorts might have the capability to short AMC stock, this is only temporary.
The retail community has made big enough ruckus to where regulators are finally investigating naked shorting, or at least acknowledging the problem.
What does this mean for the AMC shareholder?
Short sellers have used this rinse and repeat process for years now.
The important thing in 2023 is that AMC is able to continue raising cash to eliminate the short thesis.
Not only has bankruptcy been off the table since 2021 (via. Los Angeles Times), but AMC movie theater attendees have increased drastically in 2023.
This in turn has increased revenue and helped AMC Entertainment pay off more debt in the past two years.
AMC Entertainment Quarter Earnings History (2021)
Below are AMC’s quarter earnings for 2021, the year the ape movement began.
AMC announced their Q1 earnings for 2021 on Thursday, May 6th.
Things have been looking particularly bullish and optimistic since that point.
The only thing getting in the way has been market makers who have big advantages over the average retail investor.
If you missed the conference call years back, you can view it here for your viewing pleasure.
It’s really hard to tell when an AMC short squeeze may occur.
Experts, analysts, and shareholders can’t identify an exact date and time because of how random the probability may be, as seen in 2021.
However, the possibility of an AMC short squeeze is certainly possible given that it is still a very heavily shorted stock.
We also now have more data then ever before that indicate a massive short squeeze is almost certain to happen.
Especially now that the SEC has announced some crackdown on shorting.
With Melvin Capital and other hedge funds out of the picture, it’s only a matter of time before others close their positions.
That is if retail investors can build enough buying pressure in 2023 like they did in 2021 to drive share prices up.
In the end, it truly is all up to retail investors!
Will investors be able to create another AMC short squeeze in 2023?
That might be a little harder now with all of the company’s dilutive proposals going into effect soon, but it doesn’t mean it’s still not possible.
Trey’s Trades AMC prediction
With that being said, Trey’s Trades predicted a short squeeze in 2021. Trey was a leader in the AMC community back in the day, though he’s recently taken time off from stock content on YouTube.
Data points towards AMC stock reaching $1000+ per share according to his research.
See what Trey had to say.
AMC short squeeze – AMC Stock Forecast – AMC Stocktwits | Trey’s Trades on AMC Short Squeeze.
The real question is, how can retail investors make this AMC short squeeze happen?
We know that short-sellers eventually have to close their positions. This means that they will eventually have to buy AMC stock at the current share price.
If retail investors continue to drive the share price up by buying the dip and holding their positions, short-sellers will have no other option than to buy from the retail investor at a higher share price.
2. Retail investors will also need to buy the climbs in order to show a demand for the stock. This doesn’t have to be huge buys, rather incremental to validate the current share price.
This play essentially creates a supply and demand scenario between retail investors and short-sellers.
However, demand must exceed supply by a monstrosity amount, as we saw in June of 2021.
The results? A short squeeze.
Just make sure to take your profits this time.
The last thing you want is to see your gains turn into losses.
Hedge funds are doing everything they can to prevent a short squeeze
How are they doing this?
By promoting false information through MSM (we’re certain you’ve seen it)
Through strategies such as short-ladder attacks in the market
Dark pool/off exchange trading
HFT and Spoofing
And, by restricting certain brokerage accounts from allowing its retail investors to purchase or buy shorted stocks as seen with Robinhood (Robing hood)
This is what retail investors can do to fight corruption:
Share content that presents facts, like this article and others to raise awareness (blog posts, analysis videos, etc.)
Continue to educate yourself and make investment decisions based on your personal analysis
What is interesting however is that Goldman Sachs has now given AMC Entertainment a price target of $175 per share in 2023.
MarketBeat reports that on July 24, 2023, Goldman Sachs gave AMC Entertainment a ‘Boost Target’ action and ‘Buy’ rating with a whopping price target of $175.
And CoinCodex is predicting AMC Entertainment stock to soar more than +9,000% by the year 2030.
“Based on the average yearly growth of the AMC Entertainment Holdings stock in the last 10 years, the AMC Entertainment Holdings stock forecast for the beginning of next year is $ 8.19.
Using the same basis, here is the AMC Entertainment Holdings stock prediction for each year up until 2030.”
The long-term AMC Entertainment Holdings stock price predictions are as follows:
By year 2024, AMC Entertainment is predicted to soar +90.66% from today’s current share price to $8.19.
In 2028, AMC stock is predicted to trade around $108.21 per share, a gain of +2,419% from today.
And by 2030, CoinCodex predicts AMC will trade near $400 per share, up more than +9,000% from today’s trading price.
In 2023, investors will need to identify the primary reasons to invest in AMC Entertainment stock today.
Redditors have touched base on this topic and are determined anything below $100 is a buy, for a short squeeze that is.
However, with so much dilution happening in 2023, you might want to consider writing and coming up with your own best-case and worst-case scenario plan.
The approved proposals is a massive win for the movie theatre company whether you strongly agree with them or strongly do not.
Identifying why you’re still invested in this company or why you would like to is something that will vary from individual to individual.
“The steps we will be taking now are shareholder approved and mean the following to AMC:
AMC will be more resilient: Were it not for our ability to have raised equity over the past three years, AMC simply would not have survived the pandemic-induced decline in our business. Looking forward, the flexibility to raise equity capital at the appropriate times is an absolutely vital tool for any large company, and AMC is no exception.
We eliminate capital raising inefficiencies of APE units trading at a significant discount to AMC shares: Converting APE units to AMC shares results in a single price for all AMC equity. This single price eliminates the unnecessarily high dilution caused by the lower market price of APE units. For the past full year, for example, to raise cash, AMC could only sell APE units, and they only could be sold at a great discount to AMC shares. With single equity capital structure, I believe AMC will be able to raise equity capital more efficiently and on better terms in the future.
“Some of you fear dilution is a mistake no matter what. You are wrong.
To the contrary, sometimes raising money is an absolute imperative.
Over the past twelve months, for example, AMC raised $418 million of cash through the sale of APE units.
As of the most recent June 30 quarter end, AMC had $435 million of cash on hand.
Can you imagine how dire our circumstances would have been if we hadn’t had the foresight to raise that cash?
Companies that run out of money face financial ruin.
Just ask Cineworld/Regal shareholders, or ask Bed, Bath and Beyond shareholders.
But at AMC at the moment, we have a positive market cap, and we are so much stronger because we raised money along the way,” said Adam Aron on Monday.
Where was AMC trading at before the pandemic?
AMC was actually trading between $30-$35 back in the booming party economy of 16′!
AMC stock started to decline as their debt increased and hedge funds began to heavily short it.
However, AMC Entertainment Holdings, Inc. is in a completely different world today than it was during the pandemic with box office number reaching pre pandemic levels.
AMC Announced a new record high earnings report last Tuesday.
Analysts have been expecting big earnings results from the movie theatre chain due to the rise of this year’s second quarter box office numbers.
“While we still have much work ahead of us on this front, AMC’s glide path to eventual recovery continued with significant pace in the second quarter of 2023 as our results set new records and represent AMC’s strongest second quarter in four full years.
Following an impressive start to the year in the first quarter of 2023, the second quarter yet again showed great progress.
AMC saw more than a 12% growth in attendance, a 15% growth in total revenue and a 71% increase in Adjusted EBITDA compared to the second quarter of 2022.
Indeed, Adjusted EBITDA was $182.5 million, the highest such quarterly figure since the fourth quarter of 2019,” said AMC CEO Adam Aron.
Barbenheimer Produces Big Results in 2023
Towards the end of July, AMC Entertainment broke a 4-year weekend high record as “Barbenheimer” produced results bigger than expected.
The results demonstrate AMC’s path to recovery is also strong in Q3 of 2023.
“Barbie” ended up with $162 million in its first weekend of release, above Sunday’s already record-breaking estimate of $155 million. The Warner Bros. film, starring Margot Robbie declined just 9% from Saturday to bring in $43.7 million on Sunday.
Those ticket sales rank as the biggest opening weekend of the year, besting “The Super Mario Bros. Movie” ($146 million).
“Barbie” also marks the biggest debut ever for a film directed by a woman, overtaking Anna Boden and Ryan Fleck’s 2019 blockbuster “Captain Marvel” ($153 million), says Variety.
“Oppenheimer,” also beat expectations with $82.4 million, slightly higher than Sunday’s huge $80.5 million projection.
At the international box office, Oppenheimer added $98 million for a global tally of $180 million.
“The box office powered to its fourth-biggest weekend in history with over $300 million industrywide, said Variety.
What If a Short Squeeze Doesn’t Happen?
If an AMC short squeeze doesn’t occur, AMC stock price should still go up during the longer term process allowing shareholders to make at least some sort of profit.
That is, as long as the company continues to improve going into 2024 and the rest of the decade.
With AMC theaters now open since 2021, it’s inevitable that the company will begin to see bigger sales revenue every time a new title is released.
Keep in mind that AMC’s share price during the booming party economy of 16′ was roughly around $30 per share.
If a short squeeze doesn’t happen, fundamentals will continue to bring the stock up as more investors are buying the stock.
It’s also important to keep in mind that majority of the float is also held by retail investors, so the company has a huge support.
AMC hasn’t squeezed yet primarily to two main reasons.
The stock requires volume to drive the stock price action up
Shorts need to close their positions
Volume will surge as more and more retail investors (as well as institutions) get in on AMC stock.
Regarding shorts closing, retail investors need to squeeze them out of their positions by holding their positions and helping increase AMC’s short borrow fee.
You can keep tabs on AMC’s short borrow fee as it changes every day via. Ortex, or Fintel.
As of 8/15 AMC’s short borrow fee rate is a whopping 921.1%.
Interactive Brokers Chief Strategist Steve Sosnick says there’s big demand to short AMC Entertainment (NYSE:AMC) stock.
He says the biggest reason aside from the company’s fundamentals is its new merge with its equity (NYSE:APE).
“It’s very hard to keep the momentum in these things because economic reality does take hold.
Bed Bath & Beyond, at one point was the best performing stock on the board until reality set in and they began defaulting, averted bankruptcy, but using a deal that is so dilutive that it’s unavoidable.”
Sosnick says AMC is in a very special situation because of the proposal to merge APE with AMC common shares.
“Right now we’re seeing such a demand to short AMC partly because of its difficulties but partly because of the special situation.
This really is what they were looking for in some ways as the mother of all short squeezes.
The borrow rate, it costs you 700% to borrow the shares overnight — if you can find them,” said the Interactive Brokers Chief Strategist on Yahoo Finance.
Is AMC Entertainment stock about to squeeze this year?
“Redditors, thank you so much for helping create the best pipeline we’ve ever had”, said Ken Griffin on Business Insider.
Ken Griffin, on how the GameStop frenzy helped raise Citadel’s profile with potential hires.
Business Insider says the SEC found no truth to any of the conspiracy theories but how can the SEC really go against one of the most powerful hedge funds in the world?
Transcripts showed Citadel and Robinhood did in fact have “blunt negotiations” the night prior to the halts.
A Miami district court judge admitted the Citadel and Robinhood transcripts were suspicious.
However, the federal court has dismissed the case due to a ‘lack of evidence’.
Let us know in the comments section below what an AMC short squeeze would mean for you!
If you’re an AMC shareholder let us know in the comment section below.
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Market News Daily: MMTLP scandal gets recognized as one of the biggest Wall Street fraud events.
The MMTLP scandal is being recognized as one of the biggest Wall Street frauds of the decade.
One of the most recent scandals has been that of the ‘meme stock’ frenzy when broker firms, hedge funds, and even regulators colluded to stop AMC, GameStop, and other stocks from rising.
Investors who held shares of MMTLP stock on the record date of December 12 would receive a preferred dividend of Next Bridge Hydrocarbon on Wednesday, December the 14th.
Investors anticipated a long-awaited MMTLP short squeeze during the last few trading days prior to the spinoff — primarily due to big buying volume flooding the market to receive Next Bridge Hydrocarbon shares.
However, MMTLP stock stopped trading on Thursday, December 8 after FINRA delisted the security without notice or warning.
“Effective Friday, December 09, 2022, the Financial Industry Regulatory Authority, Inc. (“FINRA”) halted trading and quoting in the Series A preferred shares of Meta Materials Inc. (OTC Symbol: MMTLP).
Pursuant to Rule 6440(a)(3), FINRA has determined that an extraordinary event has occurred or is ongoing that has caused or has the potential to cause significant uncertainty in the settlement and clearance process for shares in MMTLP and that, therefore, halting trading and quoting in MMTLP is necessary to protect investors and the public interest.
The trading and quoting halt will end concurrent with the deletion of the symbol effective Tuesday, December 13, 2022.”
“See also Form S1 Registration Statement for Next Bridge Hydrocarbons, Inc. stating that…immediately after the Spin-Off, all shares of Series A Non-Voting Preferred Stock of Meta shall be cancelled. Available here.”
Next Bridge Hydrocarbons Weighs In
In simple terms, FINRA’s only explanation was that the halt was due to ‘uncertainty’ in the settlement process which could harm investors and public interest.
And perhaps that’s true — though shareholders don’t think they were referring to retail investors at all, but rather FINRA’s private investors and institutional partners, the hedge funds.
Next Bridge Hydrocarbons released the following statement regarding the MMTLP halt.
“We recognize that some of our shareholders who owned Meta’s Series A Non-Voting Preferred Stock prior to the Spin-Off might have been affected by FINRA’s halting of the trading in that stock while the Company was still wholly owned and controlled by Meta.
The current board and officers of the Company have no information from FINRA regarding the Trading Halt other than the information in the public notice published by FINRA announcing the Trading Halt.
Further, FINRA did not provide any advance notice to the Company or Meta prior to its initiating the Trading Halt.
While we were not involved in the Trading Halt, we certainly empathize with anyone adversely affected by the Trading Halt and are assessing the matter.
The Company believes that our primary means of delivering shareholder value is to develop our interests in the Orogrande Basin, and we remain focused on this objective.”
But investors remain confused as to what happened to their money which was frozen from trading prior to the delisting.
What’s happened with MMTLP has become one of the biggest Wall Street frauds in financial history.
Real People Have Been Affected
“It was the anniversary of my husband’s passing; it was a really hard time. My kids all understood what was happening with MMTLP, and it was hard for them to understand, it was hard for me to admit to my kids the depth of the dishonesty, and lying, and cheating, and stealing that goes on in our country”, says MMTLP investor Deborah W.
“I went through the 18 months of just stringing me and my family and everyone everybody with holding off on things that we might have wanted to do; vacations we wanted to take, because I didn’t want to pull any of the money out of what I had in. And MMTLP, I had liquidated other positions, I took every spare dime we had, and I put it towards MMTLP”, says Huck, another MMTLP investor.
FINRA placed a U3 halt on MMTLP on the final days before it was delisted.
It was one of three U3 halts in the OTC market in U.S. history.
The U3 halt froze MMTLP shares so shareholders couldn’t buy nor take their money out from the security.
MMTLP was delisted, robbing MMTLP investors of their money right in front of their eyes.
The delisting protected hedge funds from having to close their short positions right before shares of MMTLP stock began to rise, or squeeze.
Retail investors are naming the MMTLP scandal one of the biggest Wall Street frauds in financial history.
Investors lost their entire retirement funds and life savings in MMTLP.
Aside from the public announcements in the beginning of this article, FINRA nor the SEC have been able to explain truly what happened to investors shares of Next Bridge Hydrocarbons, or their money invested in MMTLP stock.
In the video below, MMTLP Studios goes over possible solutions the SEC and FINRA can take to make things better, along with other investor comments.
Were You Affected by the MMTLP Wall Street Fraud?
First, I’d like to say that my heart goes out to those affected by this unfair and unprecedented event in MMTLP.
Many investors in several communities are experiencing blatant manipulation in their favorite company stock in similar or their own unique way.
Raising awareness is the first step to getting the message seen.
I’ve seen and heard some of your stories through the community.
If you were affected by the MMTLP Wall Street fraud and would like to share your story, please feel free to comment it down below for other retail investors to see.
Share this article to get your voice and story heard.
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A threshold security protects stocks that have had 5 consecutive settlement days in a clearing house as “Fail-To-Delivers“.
Protection from the SEC also requires that the stocks FTDs total more than 10,000 shares.
A fail-to-deliver for our new retail investors basically means that an investors trading contract, such as a call option, was not executed when it should have been.
This occurs when a clearing house does not deliver on their obligation to close the contract.
This creates fail-to-delivers which in turn limits the momentum and growth of a stocks price action.
In other words, it tampers with the natural flow of a stock’s growth.
FTDs and naked shorting
Another known cause for FTDs is the practice of naked short selling.
This is when hedge funds trade imaginary shares that they don’t own or exist.
These transactions fail to clear since the shares were never in a traders account to begin with.
This illicit activity is basically like adding zeros to a check you received without the full amount being in that account.
When you get caught you’ll eventually have to pay it back.
It’s that or you go to jail but we all know these sleezy people always get bail.
Well now the SEC has gotten involved and is saying no more.
A threshold security comes with regulations that heavily play in retail’s favor.
One of the regulations is known as rule 204.
Rule 204 requires brokers and dealers that are participants of a clearing house to close out failure-to-deliver positions.
Yes you read that correctly.
Here is the source straight from the SEC’s “key points” under III. Regulation SHO.
“Closing out requires the broker or dealer to purchase or borrow securities of like kind and quantity.”
SEC
AMC Entertainment was added to the NYSE Threshold Securities list on Friday, June 25th 2021 during the ‘meme stock frenzy’.
This year it made the list this month.
Section 203(b)(3) states that clearing houses must close FTDs if they persist on to 13 consecutive trading days.
Why it Matters
It’s a win-win situation for retail investors. If hedge funds continue to manipulate the market and generate FTDs then they’ll be obligated by law to cover the millions of dollars and shares they’ve been failing to process.
On the other hand, if shorts begin to properly exercise contracts then we will begin to see momentum pick up rather quickly from executed trades. This too can create several gamma squeezes due to the amount of volume being pumped into the market.
By adding AMC Entertainment to the Threshold Securities list, the SEC is basically stepping in and calling hedge funds out on the court.
It’s a way of saying things need to be done the right way or else.
I’m extremely curious to see how this will play out.
