AMC CEO Adam Aron said during Q3 announcements that by using a DRS, or Direct Registration System, investors could prevent the company stock from being shorted.
“If you direct register your shares, they cannot be shorted”, said the CEO.
Now investors who were once skeptical on DRS suggest this could be the only way to trigger a massive short squeeze event.
Institutions have been able to suppress AMC’s share price through overleveraged shorting in the market.
And unfortunately for retail investors, the real demand for the stock has been hidden for far too long.
Is DRS the strategy to beating Wall Street again?
Let’s discuss it.
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What is a DRS?
The Direct Registration System, or DRS, is a system for book-entry ownership.
DRS offers investors and shareholders an alternative from receiving a physical certificate, by allowing the shares to be recorded in the books electronically.
The way AMC shareholders can transfer their shares to a DRS is by contacting their brokers and requesting the transfer directly.
Shares registered through DRS cannot be lent to short-sellers by brokerage firms.
DRS might also be able to expose the fraud that occurs behind the doors of market makers and other financial institutions.
Naked shorting has been a real problem in the finance sector and unfortunately the SEC has not tackled it head on.
It’s very possible DRS kills two birds with one stone.
But I’d love to hear your thoughts on the segment.
Should AMC shareholders DRS their shares?
And do you think it will make a difference?
Leave your thoughts in the comment section below.
Latest AMC Stock News
AMC beat earnings expectations for Q3 of 2022, ending the quarter with just under $900 million in liquidity.
The company seated more than 53 million guests in Q3, a 33% increase from Q3 of 2021.
Zoom and AMC are partnering up to arm the movie theatre chain with communication services across movie theatres in 17 U.S. states.
The company also plans to issue AMC credit cards by the early 2023.
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