AMC Entertainment has joined the NYSE Threshold Securities list again.
The last time made this list was sometime in June of 2021.
This educational article is going to go over what this means for the company and how it even made the list in the first place.
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Lets get started!
What is a Threshold Securities List?
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.
We’ve been heard community.
And this is massive news.
Here’s how this will affect AMC’s stock price.
Related: Investors Say CEOs Should Fight Naked Short Like GNS
Why is a threshold security significant to AMC?
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.
What do you think?
Leave your thoughts below.
Read: Deputy Global Treasurer Michael Kurlander resigns from Citadel
- NYSE Threshold Securities AMC List – visit here
- SEC Key Points About Regulation SHO – visit here
- Threshold Securities – Investor.gov – visit here
- Threshold List Definition – Investopedia – visit here
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Hey Frank, just wanted to say thank you for keeping us informed and for giving us hope. I’ve been holding AMC for 2 years and have been troubled by the corruption in the SEC. You always saw light at the end of the tunnel.
Thanks for your relentless advocacy, Frank!
I am a chronic optimist and think the SEC might actually do their full job as the DOJ is finally sniffing around this pile of bullsh!t.
My cost was close to 60 and holding and gone thru heart aches each andeveryday for the last couple of months with the only one target that’s when squeeze happens.. pandemic changed our lives and livelihood so much. Have ndaughters marriage coming up in few months and need to surprise her.. and will donate 100 shares worth of $$$s to charity who addresses hunger .
Thank you Frank; interesting & informative article. Hats off to Your quick responses.
Glad I could provide value – thanks Dinda 🤝
Since Monday 7/5 is a non-trading day, isn’t the 13th day July 8th? That means they don’t have to start covering until July 9th at the beginning of the trading day?
Steel, you’re right brother. Completely forgot about the holiday weekend. Good catch
Hi Frank. I only have been in AMC for 5 weeks now, and still learning. Thanks for all your info. How do I know that the 57 stocks I hold are not naked, but are real shares? May be a dumb question, but I couldn’t find an answer on the internet. I lie in Canada, if that may make a difference.
Hey Bernie! Thanks for reaching out. We really don’t know whether we hold ‘real’ or ‘naked shares’ per say, but it doesn’t really matter. The reason being is that this now becomes the problem of the short seller. Some retail investors might have paid for these synthetics and in return making them real per say. Our transactions have already been accounted for which means we get what we paid for. With that being said, naked shorting is usually done amongst themselves. Retail investors should have no fear. If your transaction has gone through there’s nothing to worry about.
There are all ready a plenty of laws in place yet they still break them and get slap on the wrist for doing so. I bet they consider that as part as the there routine cost of doing business.. They probably have budget for fines. But will see lots of media on this they going to have to do something. The U S security’s can not keep looking like they are looking like that have there head in the sand or they are in bed with them.
I agree with you 100% Alvin. The only thing we can continue to do is expose them. Other powers will make a judgement call. Thanks for your comment brother.
How much do you think we could get per share?
In a perfect scenario, Ryan – crypto numbers per share. We’re talking about shorts covering millions upon millions of naked shares they’ve traded, and this is without any issues from loopholes we’re unaware of. If you think about Bitcoin, it’s huge primarily because there is limited amount of it and there’s a massive demand for it. Retail investors can create this type of supply and demand. With that being said, we should also keep a close eye on the charts as this massive event continues to unfold. As more data is presented to us, the more we’ll know. As you and the community know, we will continue to share all news related to this crazy awesome opportunity. Thanks for commenting.
I will pay off my home on 17.8 acers along with other liabilities. Invest and continue to grow my apiary for agricultural tax relief, continue to protest my property taxes, educate my children about this empowering movement in order to pass this knowledge to my kids for a better life for them.
Love it Ryan. I too think it’s extremely important to pass down the knowledge to our kids so they get a head start.
Frank your information is going to be life changing for me and my whole family , when my daughter gets married I would like to invite you with an all paid expense & red carpet treatment. I will pay for my daughters wedding at the Breakers here in Florida. I will be reaching out to you hopefully soon.
You made me smile Renan, an honor brother. I’m just happy to help. Thanks for being a part of this amazing community.
I got in hard at $12. Never thought I would be a part of something so worthwhile. This goes beyond personal gain. While I am grateful for that, I want the markets to be legit and opportunistic for people around the world to use. What a pity when the very, very, rich become overly consumed with their own personal gain that every aspect of business has to hurt the small guys and solely make them abundantly richer. I am entrepreneurial, but one on. Particularly, I despise the fake news and false propaganda exercised during this scenario. God bless!
I couldn’t agree any more, Bernard. Well said. Thank you for putting your voice out there.
Is there any way to compare this to when GME started showing up on the threshold list? in an effort to predict price action and what is to come?
The information I’ve seen on Reddit from when this occurred with GME traces all the way back to late October of 2020. GME was trading around $10-$11 during that time. It then skyrocketed in late January. All this tells us is that GME did begin squeezing several weeks after the threshold. AMC could be sooner or later, time will tell!
Any chance they temporarily halt trading on AMC, settle the FTDs, then reopen trading to mass selling?
You know I’m not exactly sure how that will happen. I can see the market opening to continuous gamma squeezing just on FTDs. It’s just a possible scenario of course. Price would certainly go up. I don’t think the community as a whole will begin to sell from this major jump up. You will have people taking profits from the mere excitement; however, this price action would really only be for ‘overdue’ contracts, not a short squeeze.
I will celebrate the win with a nice bottle of whiskey and a trip with my family.
Something I would do
I will celebrate by spending 1K on dentists xD
Haven’t heard that one yet, nice!
It’s a Beautiful thing. ❤️💰
Without a doubt brother ☝
I’m buying an Apache helicopter and a yacht to land it on
Now that’s what I call an entrance to the party
My biggest concern, is that though the SEC has “heard” us, will they actually DO anything about all the cheating the hedgies are doing, or will they continue to look the other way?
Don’t underestimate the power we the people have when we unite. If the SEC cannot meet the people’s demands then they too will be exposed. Lets give them the benefit of the doubt.
Thank you so much. This will truly be life changing for my family.
And mine, and theirs. Thanks for commenting.
As always, great read. Thank you for your perspective.
Thanks for coming back Chris 🤝 Cool last name by the way.
I’m going to finally recover after losing everything in 2008 market crash. I’ve been holding since December 2020 💎🙌🚀👈
Wow John, I hodl for you brother. Justice will be served 🦅
Great info !!! I believe the AMC box office results this weekend couldn’t have come at a better time . The company obviously has momentum with some big Movies around the corner . If we have another 100 million volume day today , we have momentum and volume will kill the hedge fund ability to borrow enough shares to stop the stock .
Most definitely! Soon they will run out of borrowed shares to keep us consolidating too.
Love your blog in general. Information is very informative and is a springboard for me to further my own research. Saw on discord about your loss, bless up brother 🙏🏾
Glad I can be that platform for you Sekou. And thank you brother, I really appreciate that 🙏🤝
Love your stuff! Keep up the good work!
I appreciate your comment Arnav – thanks for coming back 🤝
I just want a 1000 hp single turbo shit box from Japan and everything else goes into family and savings for the future and some part will go in a stable slowly building stock.
I’m going to create a group of super intelligent apes, I’ll probably call the alpha of the group Caesar (wink*wink*cough*). Honestly, I would just be happy with paying off my credit cards. Please tell me the blog/channel goes on even when we’re all apes on the moon!!
I’m not Frank “Caesar” Nez for no reason 😂. Of course I’m going to keep the AMC chat on brother. We will continue to fight corruption, find new opportunities, and make a ton of money along the way.
Hey Frank i’m a late bloomer long story. Regardless I am still in the play I only have 45 shares and i’m in slightly above today’s close 54an change.
I haven’t had a chance to check out all of your dd and efforts regarding amc. Yet this article was literally one of the best reads I have seen to date.
I just want to say thank you because you have added a level of determination to my overall belief in this movement.
The little guy
Also with my proceeds I am going to buy brand new shopping carts with starlink GPS systems built in to them. Then gift them to all the hedge fund executives since we’re all going to be in their bentleys and what not.
P.s. the GPS system is so they can locate all the nearby overpasses, bridges and tent cities. You know because we’re all going to be living in there penthouses and mansions.
Love your comment brother 😂 thanks for reading FrankNez 🤝