Tag: GameStop News (Page 1 of 3)

Analyst: AMC and GME Have Highest Squeeze Potential

Market News Daily - Analyst say AMC and GME Have Highest Squeeze Potential.
Market News Daily – Analyst says AMC and GME Have Highest Squeeze Potential.

S3 analyst says AMC Entertainment (NYSE:AMC) and GameStop (NYSE:GME) stock have the highest squeeze potential in the market.

“As the broader stock market has been on a tear for about a month, things are looking grim for investors with big short positions in stocks like AMC Entertainment Holdings Inc. and GameStop.”

AMC’s and GME’s short interest data is what ignited the massive rallies in 2021.

Today, both AMC and GME have a high short interest of 26.69% (AMC) and 20.73% (GME).

AMC’s short interest was only 25% when it surged to its all-time high of $72 per share in June of 2021.

Short interest dropped to 14% as short sellers closed positions only to pick right back up throughout 2022 and 2023.

Both AMC and GameStop shares have been suppressed from rising through heavy dark pool trading and suspiciously through naked short selling, evident in high FTDs (fails-to-deliver).

Two years later and GameStop is finally a profitable company.

AMC Entertainment, the largest movie theatre chain in the world, continues to innovate and creatively raise cash with a mission to erase its debt accumulated during the pandemic.

Hedge Funds Face Big Risks

Ihor Dusaniwsky, head of predictive analytics at financial technology and analytics firm S3 Partners, compiled a list of those most vulnerable stocks, headed by such names as AMC (AMC), GameStop Inc. (GME), Coinbase Global Inc. (COIN) and CarMax Inc. (KMX).

“One factor that is also killing profits for short sellers is the borrowing costs on stocks that no one is willing to part with, and the stock that figures highest on that list is AMC.”

AMC’s cost to borrow recently skyrocketed to more than 1,000% with its cost to borrow average currently being reported at 928%.

“Short sellers want to short the stock, but they are not able to get a stock borrow locate and therefore cannot execute their short on the street,” Dusaniwsky told MarketWatch in an interview.

“But, when any stock borrows become available — lenders, brokers know they can charge inflated fees as there is huge demand for the name.”

“In this case there is an AMC–[preferred stock] APE arbitrage trade that will be profitable if the conversion occurs soon because the high financing costs are eating into those expected profits every day, including weekends,” Dusaniwsky said.

But the S3 analyst isn’t the only one stating there is big squeeze potential in AMC and GameStop.

Related: “The Game is Rigged” Says Ex-Citadel Data Scientist

Strategist Says Mother of All Short Squeezes is Here

Market News Today - Analyst: AMC and GME Have Highest Squeeze Potential.
Market News Today – Analyst: AMC and GME Have Highest Squeeze Potential.

Interactive Brokers Chief Strategist Steve Sosnick says there’s big demand to short AMC Entertainment 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.

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Market News Today - Is Amazon buying AMC Entertainment?
Market News Today – Analyst: AMC and GME Have Highest Squeeze Potential.

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Robinhood Sued in New Class Action Lawsuit

Market News Daily - Robinhood Sued in New Class Action Lawsuit.
Market News Daily – Robinhood Sued in New Class Action Lawsuit.

Robinhood (NASDAQ:HOOD) is being sued in a new class action lawsuit by Klafter Lesser LLP, Pessah Law Group, and PC and Chelin Law Firm in California.

The firms are seeking to represent investors who held call options on the Robinhood trading platform as of the close on January 27, 2021 to purchase any of the following stocks:

American Airlines Group Inc. (NASDAQ:AAL), AMC Entertainment (NYSE:AMC), BlackBerry Limited (NYSE:BB), Bed Bath & Beyond Inc. (NASDAQ:BBBY), GameStop Corp. (NYSE:GME), or Nokia Corporation (NYSE:NOK).

The latest Robinhood class action lawsuit alleges that on January 28, 2021, Robinhood prohibited purchases of the stocks underlying the affected options on its platform and also prohibited purchases of the exercise of the affected options, and only allowed the closing out of such positions.

The lawsuit further alleges that during the period January 29, 2021 through February 4, 2021, Robinhood imposed significant limits on any purchases and continued to prevent the exercise of the affected options on its trading platform.

Consequently, the value of the affected options dropped dramatically and remained suppressed throughout the month, causing investors to suffer big losses, says the press release.

“It is alleged that by virtue of these purchase and exercise prohibitions and limitations, Robinhood engaged in market manipulation in violation of Sections 9(a) and 10(b) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78i(a) and 78(j)(b), and Rule 10b-5 promulgated thereunder by the U.S. Securities and Exchange Commission (17 C.F.R. § 240.10b-5)).”

Investors Are Looking to Recover Losses

According to the lawsuit, Plaintiffs seek to recover damages for those holders of the Affected Options who suffered losses resulting from this alleged market manipulation.

More than two years later after the ‘meme stock’ frenzy swept the entire financial markets by a storm, and the events are still as strong as they were then.

“The game is not fair and it never has been. Individual investors, even when operating in a swarm, are destined to lose. How do I know? I helped design the game,” says ex-Citadel Data Scientist Patrick McConlogue.

Patrick McConlogue appeared on Fox Business during the ‘meme stock’ frenzy of 2021 when retail investors created one of the biggest scares in Wall Street history.

GameStop and AMC shareholders were able to create panic on Wall Street by heavily buying shares of the overleveraged shorted stocks.

As share prices soared, short sellers experienced massive losses.

GameStop was able to put Melvin Capital out of business, but Patrick McConlogue says other hedge funds were able to make back billions in losses during the halt.

The halts allowed hedge funds to enter AMC and GameStop knowing shares would plummet, allowing them to capitalize on the deflation of the price.

Patrick says the rules of the game also heavily favor hedge funds, something retail investors have urged SEC Chairman Gary Gensler for years to change.

“I respect many of my colleagues, the problem isn’t the people, it’s the rules of the game which heavily favor the funds.”

On the Search for a Lead Plaintiff

The Private Securities Litigation Reform Act of 1995 permits any investor who held Affected Options on the Robinhood trading platform as of the close on January 27, 2021, who sold such options, or such options expired, during the Class Period to seek appointment as lead plaintiff in this class action lawsuit.

A lead plaintiff is generally the movant with the greatest financials interest in the relief sought by the putative class who is also typical and adequate of the putative class.

A lead plaintiff acts on behalf of all other class members in directing a class action lawsuit.

“The lead plaintiff can select a law firm of its choice to litigate the class action lawsuit. Pursuant to the Private Securities Litigation Reform Act of 1995, if you wish to serve as lead plaintiff, you must move the Court that this action is pending in no later than June 9, 2023.”

You can contact the Clerk of the Northern District of California, at 450 Golden Gate Avenue, San Francisco, CA 94102-3489, or by calling (415) 522-2000, to find out if this lawsuit has been transferred to the Southern District of Florida and also for a copy of the Complaint.

To discuss your rights or interests regarding this class action, you are free to consult counsel of your choosing.

You may also contact Nancy Velasquez of the Klafter Lesser LLP law firm at (914) 934-9200 or via email at nancy.velasquez@klafterlesser.com, or Pessah Law Group, PC at (310) 772-2261 or via email at info@pessahgroup.com or Stuart Chelin at (310) 556-9664 or via email at stuart@chelinlaw.com.

Klafter Lesser LLP has extensive experience in prosecuting class actions and the founding partners of the firm, who have extensive class action experience, have recovered over $1 billion for the benefit of classes in numerous cases. 

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Market News Today - Robinhood Sued in New Class Action Lawsuit.
Market News Today – Robinhood Sued in New Class Action Lawsuit.

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GameStop is Now a Profitable Company, Should You Buy It?

GameStop is now a profitable company
Market News Daily: GameStop is now a profitable company, should you buy it?

GameStop (NYSE:GME) is now a profitable company.

The company posted a quarterly profit for the first time in two years.

Shares soared up to 50% on Tuesday and up to 40% on Wednesday as we saw big buying volume coming in.

For the quarter ended Jan. 28, net sales dropped slightly to $2.23 billion from $2.25 billion in last year’s fourth quarter.

GameStop also posted a profit of $48.2 million, or 16 cents a share, compared to a loss of $147.5 million, or 49 cents, a year ago.

Since the ‘meme stock’ frenzy, we know GameStop has been working on cutting costs significantly which actually helped the company gain profitability.

Selling, general and administrative expenses came in at $453.4 million for the quarter, or 20.4% of sales, compared to $538.9 million, or 23.9% of sales, in the year-earlier period.

CEO Matt Furlong said on an investor call the company is going into 2023 with further plans to cut excess costs including in European markets, where it has already exited and begun to pull out of some countries.

He said that GameStop is also considering bolstering its business with higher margin categories such as toys.

“GameStop is a much healthier business today than it was at the start of 2021,” he said.

Is the GameStop Short Thesis Dead?

GameStop remains heavily shorted with a high short interest of 24.08%.

This means short sellers are still holding on to their short positions.

The company is no longer in danger of bankruptcy and has now posted profits after two years.

Will short sellers finally close their positions?

The effects would certainly trigger another short squeeze like we saw in January of 2021.

But experts still believe the markets haven’t seen a bottom which means we’re likely to see continued shorting in GameStop until the economy as an entirety begins to shift again.

The GameStop short thesis may be dead, but short sellers have not entirely left yet.

Though it is important to note that short sellers have lost $610 million in GameStop since the start of the week.

If GME stock continues to rise, it might put enough pressure on short sellers to just call it quits, sending this rocket back to the moon.

Is GameStop a Buy In 2023?

GameStop is now a profitable company in 2023, putting the company out of great risk from bankruptcy.

Its shareholder base continues to hold the company stock in an effort to squeeze short sellers from their positions once again.

Is it worth investing money you can afford to lose in GameStop right now?

Absolutely.

The company has for the most part eliminated the short thesis with its profitability and short sellers are now stuck holding significant losses.

Rising share prices like we saw in January of 2021 is all the stock needs to squeeze short sellers from their positions.

While many people made money from GameStop during the ‘meme stock’ frenzy, many incurred heavy losses too.

If we see history repeat itself in 2023, be sure to have a plan.

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Market News Today - Can the SEC suspend dark pools?
Market News Today – GameStop is now a profitable company, should you buy it?

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Steve Cohen’s Point72 Buys 606,000 Shares of GameStop

Market News: Steve Cohen's Point72 Buys 606,000 shares of $GME stock.
Market News: Steve Cohen’s Point72 Buys 606,000 shares of $GME stock.

(Business Insider) Steve Cohen’s Point72 supersized its bet on Elon Musk’s Tesla last quarter and made an unexpected wager on GameStop (NYSE:GME) stock.

The billionaire investor’s hedge fund purchased nearly 878,000 Tesla shares, worth $108 million as of December 31.

It also held bullish call options on another 60,500 shares of the automaker at the year’s end, a Securities and Exchange Commission filing revealed earlier this week.

Cohen and his team scooped up 606,000 shares of the video-game retailer, a stake worth $11 million as of December 31.

In 2021, the New York Mets owner deactivated his Twitter account after receiving several threats from users during the ‘meme stock’ rally.

“I’ve really enjoyed the back and forth with Mets fans on Twitter which was unfortunately overtaken this week by misinformation unrelated to the Mets that led to our family getting personal threats,” Cohen said in a statement.

Cohen’s hedge fund, which managed nearly $19 billion in assets at the time, lost nearly 15% after retail investors caused shares of videogame retailer GameStop to surge in 2021.

The losses at Point72 are mainly due to the company’s investment in hedge fund Melvin Capital, which bet against GameStop and had to receive nearly $3 billion in emergency cash from two outside investors, one of which was Point72.

Melvin Capital shut its doors in June of 2022.

GameStop News Today

Market News: Latest GME stock news.
Market News: Latest GME stock news.

Today, GameStop shareholders are looking to recreate the events that occurred in 2021 when stocks soared to all-time highs.

One creative way ‘apes’ are fighting Wall Street in 2023 is by registering their shares via a Direct Registration System, or DRS.

The company says at least 30% of its shareholders have registered their shares with the Direct Registration System (DRS) which equates to approximately 71.3 million shares.

The efforts from retail investors come as a means to prevent manipulative short seller attacks.

By registering their shares, company stock can no longer be lent out to short sellers.

$GME stock is up more than +25% this year-to-date.

Related: Will DRS Trigger a GameStop Short Squeeze?

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Market News: Latest GME stock news.

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Occupy the SEC 2023 is Here: What’s Happening?

Occupy SEC 2023: Latest market news - Franknez.com.
Occupy SEC 2023: Latest market news – Franknez.com.

Retail investors are occupying the SEC headquarters in Washington D.C. on January 27th and January 28th from 10am-4pm.

The 28th marks the two-year anniversary of the ‘meme stock’ frenzy of 2021 when Robinhood and other brokerage firms prevented investors from buying more shares of GameStop, AMC, and other heavily shorted stock in order to prevent firms from collapsing.

Regulators interfered with the people’s money by suppressing shares from rising.

Majority of investors within these communities never left, but rather hoped for justice and change in the financial system.

Retail investors have raised the issues of dark pools, OTC trading, and a number of conflicts of interest that pin regular investors to the ground.

Discussions surfaced in 2022 of protesting several SEC locations in the U.S. but never came to fruition.

Some retail investors argued against these actions while many more said they are necessary to get their voices heard.

Here’s what’s happening in the retail community today.

What is Occupy SEC 2023?

protest
Market News: What is Occupy SEC 2023?

The objective of occupying the SEC is to demand changes in the financial markets and to protect retail investors and companies from naked short selling and short selling misconduct.

The nationwide protests will occur on January 27th and January 28th between 10am and 4PM at 12 SEC locations, including the SEC headquarters in Washington D.C.

Outrage filled the retail community when SEC Chairman Gary Gensler confirmed 90%-95% of retail orders are processed in off-exchange platforms where the true demand for retail orders is not being reflected on the lit New York Stock Exchange.

The Wall Street ‘watch dogs’ turned a blind eye to the Madoff events that occurred during the last decade and now they’ve turned a blind eye to naked short selling and several conflicts of interest happening today within the media, hedge funds, and even regulators.

Retail investors are saying ‘we know’ what’s happening and ‘we need you to take care of it now’.

Occupy the SEC 2023 are meant to be peaceful protests.

Communities are tired of their investments in their favorite companies plummeting all because they’ve become targets of aggressive short sellers and manipulative tactics from Wall Street.

Now they’re taking the word to the streets despite gaining much attention on social media.

The lack of market transparency since the events that occurred in January of 2021 have led to these protests.

Occupy SEC 2023 LIVE

You can watch Occupy the SEC 2023 LIVE here.

Retail investors chant “do your job” when referring to the inaction from the SEC.

What is Stopping the SEC from Taking Action?

SEC Chairman Gary Gensler told ‘We The Investors’ he understands retail’s frustrations.

But retail investors aren’t convinced.

The SEC Chairman says that short selling is a challenging area where the SEC is still working and pursuing focus on.

One of the biggest challenges according to Chairman Gensler is that Wall Street powers will send stacks of reports highlighting rebuttals on proposals aimed towards protecting retail investors.

This is primarily because certain proposals aimed to protect retail investors conflict with Wall Street money.

And because these firms are market participants, like retail investors, these documents must be legally reviewed.

The challenge only grows when Wall Street firms open lawsuits against the SEC when certain proposals become a direct hinderance to the way these companies perform.

Regulators are in a massive bind now, facing scrutiny from both Wall Street and the average investor.

FINRA, DTCC Under Retail Scrutiny

FINRA MMTLP

FINRA has received backlash after freezing the trading of MMTLP (Meta Materials) prior to its spinoff.

The self-regulated organization is also responsible for outsourcing ‘best execution’ with the best execution rule, according to SEC Chairman Gary Gensler.

This means FINRA has the power to execute orders in off-exchange and dark markets for ‘best execution’ and ‘price discovery’.

But Gary Gensler says that this rule is too important for it to not be in the SEC’s court.

The organization contains records of every trade made available intraday, including that of naked short sales.

FINRA requires firms to be able to meet their short sale requirements as well as have a process to close out fails to deliver within their required timeframes.

However, they’re the open window that allows these manipulative strategies to occur in the market.

FTDS (fails-to-deliver) are mounting up every month according to SEC data, and FINRA is unable to get firms to close out these obligations.

FINRA’s justification towards FTDs say that firms face challenges related to miscalculations.

But Chairman Gensler says this is too important for it to not be handled directly by he and his team.

DTCC Conflicts of Interest

David Inggs Citadel DTCC

David Inggs is Global Head of Operations at Citadel and is responsible for all products across asset servicing, billing, cash management, clearing, and has a board seat at the DTCC.

The conflict of interest has raised big concerns amongst the retail investor community online as Citadel has been a leading and one of the biggest short sellers in the stock market.

On January 28th, 2021, The DTCC waived $9.7 billion of collateral deposit, limiting institutional losses and limiting retail profits during the ‘meme stock’ frenzy.

The organization allowed several naked shares to flood the market prior to the massive jump in share prices only to help financial institutions in the end.

SEC Chairman Gary Gensler has said one proposal they’re looking at this year involves tackling conflicts of interest in the financial markets.

How can investors support the cause?

Retail investors

Retail investors have been supporting the cause for years now by distributing news and information that sheds light on real issues.

Franknez.com is a media blog that supports retail investors and protects the retail community from mainstream media propaganda.

You can raise awareness in your community by sharing this article, and others, or by using hashtag #OccupySEC2023 on social media.

Advisory: This article is intended for educational and informational purposes only. This article is not advocating violence of any kind during these peaceful rallies.

Market News Published Daily

FrankNez News Today - Market News, Business News, + more.
FrankNez News Today – Market News, Business News, + more.

For more stock market, business news and updates, join the newsletter to receive weekly market news and notifications straight to your inbox.

Franknez.com is the media blog that keeps retail investors informed.

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