Short sellers are targeting AMC’s Preferred Equity (APE), shorting both the companies’ emergency fund, and shareholders’ equity.
APE’s short interest has officially surpassed AMC’s short interest, now reportedly 30.10% via Ortex Data.
During the run to $27 we saw AMC’s SI tumble to 17% signifying released short seller pressure.
However, today we see short sellers have opened new positions, raising AMC’s short interest to 21.17% and creating bearish momentum for the stock’s share price.
Well, the same thing is happening to APE.
Short sellers have targeted AMC’s Preferred Equity hoping to make some cash during a potential meltdown.
But will it be that easy?
After all, there is a big demand for both these stocks – and with enough momentum; well, it could just create two short squeezes.
Let’s discuss it below.
Volume cools leading to the weekend
AMC and APE had big volume at the beginning of the week when AMC’s Preferred Equity debuted on Monday.
In fact, APE has now set a higher average volume than AMC sitting at 71.5 million.
That’s 22.5 million more in average volume than AMC’s.
The excitement over the new ticker has retail investors invested heavily.
But others are quickly trying to kill off any momentum created by the retail scene.
This morning ticker symbol APE rose to 100 in utilization indicating short sellers have now gone into a full blown out short selling spree.
But AMC and APE aren’t the only tickers whose volume or share price cooled down leading towards the weekend.
The entire market played in bears’ favor this Friday.
The SPY fell -2.81%, while NASDAQ fell -2.74%.
SPY has a level of support around $400 and if the market continues to downtrend and breaks this level, it’s very likely we see its next major level of support at $390.
But the market was heavily oversold which means it’s possible we begin to see a nice bounce up to $417-$420.
AMC and APE closed with 35.7 million and 13.6 million in volume respectively on Friday.
Will AMC’s Preferred Equity (APE) go up?
AMC and APE currently have approximately the same market cap of 4.7 billion each – due to the split.
The company was able to join the Russell 1,000 in June of 2022 when it managed to meet the $7.3 billion criteria after reaching $7.5 billion before the cutoff time in May.
When AMC reached its all-time high of $72 per share in June of 2021, the world’s largest movie theatre chain grew its market cap to an astonishing $28.44 billion.
AMC’s market cap increased as the value of its share price increased.
How did this happen?
Well, millions of investors began purchasing the stock like crazy – volume was reaching +500 million, +700 million, and +900 million during single trading days.
Once institutions saw there was heavy momentum happening on retail’s end, they began to jump in as well.
In order for AMC or APE to reach all-time high levels, the market cap will have to increase.
Because as soon as momentum picks up again, institutions combined with short sellers buying back their shares will further fuel AMC or APE’s market cap.
Will AMC and APE skyrocket?
This will depend on how valuable the company can become, no matter how fast or how slow it achieves this process.
Why is APE being shorted more than AMC?
According to the reported short interest data provided by Ortex, APE is currently being shorted more than AMC stock.
AMC Entertainment designed APE as a means to raise capital for a rainy day.
The company has access to a fraction of shareholders’ equity should they need to pay off debt or make a worthy investment in another business venture.
APE is a tool that allows AMC Entertainment to not only stay afloat in case of another catastrophic event, but it provides the theatre chain with opportunity to grow and progress.
Short sellers are targeting this massive foundation in hopes of crippling the century old company.
Things didn’t quite work out in short sellers’ favor last year when big bets were being placed against AMC during their bankruptcy announcements.
But retail investors were able to arm the CEO with billions to resuscitate the company, burning those who prophesized the doom of the cinema experience.
Now it seems short sellers are pursuing a vendetta against retail investors and the company.
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I hope ape and amc rise slowly and steadily. Game on…
Will you be adding APE to your list of short interest stocks to watch?
https://franknez.com/list-of-momentum-stocks-short-interest-and-utilization/ it was added yesterday 📊✍️
Never mind I just checked you have it listed. This is setting up to be a potential MOASS!! If they pass the $10K student loan forgiveness you might see some extremely heavy retail buying again
Frank , I am confused Short interest I though was money/ interest Shorts paid for borrowing/ Shorting a stock. If I am correct what does the 30.10% equate to in dollars ? Is that 30.10 percent of what they paid for the stock? If so if they bought it at $7.00 that means they are paying $2.10 in interest?? How often ? Can’t be I am lost
I thought AA DRS’d APE before releasing it so that the hedgies couldn’t manipulate anything? I’m new to the market and still trying to learn. But for someone new the manipulation and fkery is so blatantly obvious it’s just mind blowing 🤷🏻♀️
Frank, the short sellers don’t seem to be worried. They’re now attacking APE with no concern of losing billions of dollars. Are we missing something?
Let’s start a discussion! Leave your thoughts below.