FTDs, or Failure-to-deliver occurs when one party in a trading contract (whether it’s shares, futures, or options) fails to deliver on their obligations.
These failures derive due to buyers not having enough money to take delivery and pay for the transaction at settlement.
In the case of sellers, it means not having the goods to meet that transaction.
AMC Issues Warning of Possible APE Short Squeeze
That same month in October, AMC released a statement warning short sellers of the possible losses they could incur in the event of a short squeeze.
“purchasers of our Class A common stock and AMC Preferred Equity Units could incur substantial losses if there are declines in market prices driven by a return to earlier valuations; to the extent volatility in our Class A common stock and AMC Preferred Equity Units is caused, or may from time to time be caused, as has widely been reported, by a “short squeeze” in which coordinated trading activity causes a spike in the market price of our Class A common stock and AMC Preferred Equity Units as traders with a short position make market purchases to avoid or to mitigate potential losses, investors purchase at inflated prices unrelated to our financial performance or prospects, and may thereafter suffer substantial losses as prices decline.”
Retail investors have been buying APE stock in efforts to trigger a short squeeze like when shareholders drove AMC’s share price from $14 to $72 per share.
While one might argue that the price surge wasn’t an actual squeeze, it was certainly a significant move to the upside.
Especially after trading at $2 prior to the ‘meme stock’ frenzy.
Will shareholders be successful at creating a short squeeze for APE?
Afterall, APE is currently one of the most shorted stocks in the market.
Debt is the only thing holding AMC Entertainment from being a fundamental buy in the eyes of most in the industry.
AMC Entertainment partnerships
AMC partnered with Chance the Rapper last year for his concert movie release.
CEO Adam Aron announced that they would be working on partnering up with industry leaders for licensing agreements that would allow AMC to provide more of these experiences to their audiences around the world.
Another successful showing was the UFC fight they held in theatres.
The CEO also expressed his optimism surrounding showing highly anticipated sports events in theatres, granted licensing of course.
Retail investors have been specifically waiting for an AMC-GameStop partnership.
A topic Adam Aron teased could be in the works at some point.
AMC theatres released “GameStop: Rise of the Players” on January 28th, earlier this year.
One thing you cannot deny is the community strength and company relationship to its shareholders.
It’s never been seen before.
Do you own AMC stock?
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So, will AMC stock go up again?
Based on trader sentiment, community sentiment, and continuous innovation from the company, AMC stock will surge again.
This bear market won’t last forever.
And although the entire market is rather shaky at the moment, there will be a correction.
Hedge funds might have leverage to short the stock, but the people aren’t leaving.
AMC Entertainment will have to focus on growth and revenue if they are to get out of debt in the future.