Tag: GameStop (Page 2 of 5)

Former Branch Chief Disappointed by SEC Meme Stock Video

SEC Meme Stock Video
Market News: The SEC attacks retail investors with propaganda

The SEC meme stock video is circulating all over social media due to its surprisingly and unprofessional attack on retail investors.

The agency was created in the 30s after the Great Crash to prevent fraud and protect retail investors from predatorial practices conducted by Wall Street.

But something happened along the way – the branch has proved to take a stance with congress in tailoring policies for financial institutions.

Who is going to protect retail investors from the corrupt?

Former SEC Branch Chief expresses her thoughts on the propaganda published by the SEC.

Let’s discuss it.

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SEC publishes meme stock video

If you haven’t watched the SEC meme stock video, it’s embedded below.

SEC Meme Stock Video

The SEC published the video on their official YouTube channel where they restricted public commenting.

Former SEC Branch Chief Lisa Braganca said she was “very disappointed to see the SEC disparage investors in meme stocks as if they must have done it thoughtlessly – especially when the SEC permits most trading to take place in dark pools.”

She then tweeted, “how about a video on dark pools Gary Gensler?”

Lisa Braganca is an activist who fights for market transparency.

She’s talked on Matt Kohrs’ channel before and has done an AMA on Reddit’s r/Superstonk answering questions about self-regulatory regulations, SEC regulation, and SEC enforcement.

Gary Gensler admitted in a Bloomberg exclusive 90%-95% of retail orders don’t go through the lit exchange but failed to mention a solution to the problem.

In an interview with Jon Stewart, the SEC Chairman fails to deliver a quality and productive discussion on solving the problems in the market.

Jon Stewart described Gary Gensler as a sheriff in town that allows blatant corruption to occur.

For Gary, it’s clear it’s more about keeping the job rather than creating a legacy.

Activism matters

wallstreetbets

The SEC’s meme stock video might try to portray retail investors as young and clueless novice investors.

But that’s far from who the retail community is.

Retail investors outsmarted hedge funds, exposed the corruption in the SEC, mainstream media, and are now attacking with this propaganda.

It’s a sign of weakness.

The retail community is made up of a very diversified group of people all fighting for the same cause.

And this is a threat to corporate media and powerful institutions.

Republicans and democrats getting together to fight for market transparency, what!?

But this isn’t just about the left and right getting together to combat corruption, it’s a global movement – and opps (opposers) don’t like this.

Trey made a great point when he stated why doesn’t the SEC tackle the problems that created meme stocks in the first place:

  • PFOF
  • Off exchange trading
  • Prime brokers
  • Arbitrage
  • Naked shorting
  • Derivative leverage
  • Etc.

Activism matters.

Retail investors must continue to raise awareness of these issues despite the propaganda.

What are your thoughts?

The SEC has ignored retail’s cry for help, and now they’ve made fun of the community with this meme stock video.

Did this unprofessionalism in our government surprise you?

I’d love to learn what you think.

Leave your thoughts in the comment section of the blog below.

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Related: Ken Griffin Attacks: "Pension Plans Destroyed by Retail Investors"

SEC Charges TradeZero America for Halting ‘Meme Stocks’

SEC Charges TradeZero America
Market manipulation: SEC charges firm for deceiving customers in ‘meme stock’ halt.

BREAKING: The SEC is charging TradeZero America and co-founder with deceiving customers about ‘meme stock’ trading halts.

“The Securities Exchange Commission today charged broker-dealer TradeZero America Inc., and its co-founder Daniel Pipitone, with falsely stating to the firm’s customers that they didn’t restrict the customers’ purchases of meme stocks when in fact they did.”

The SEC does not mention in the press release which three ‘meme stocks’ customers were not allowed to buy.

I’ll link the official source below.

Let’s discuss it.

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TradeZero America deceives customers about meme stock halting

TradeZero America Meme stocks

In late January of 2021, many broker firms halted the purchase of ‘meme stocks’.

You might have heard of the Citadel and Robinhood scandal, where the two colluded to remove the ‘buy button’.

While the scandal became headlines, the transcripts available weren’t enough to charge the institutions.

The SEC released a press release today stating that TradeZero America is being charged for deceiving its customers.

The firm told its customers they did not halt the purchase of meme stocks when in fact they did.

After the halt, TradeZero and Pipitone made misleading public statements via interviews, social media, and in a press release in an effort to distinguish their company from brokers that restricted trading during that period. 

In a Reddit “Ask Me Anything,” Pipitone said, “That some trading firms are blocking these symbols is disgusting, unprecedented… Our clearing firm tried to make us block you and we refused.”

Side note: THIS STATEMENT is disgusting.

TradeZero America received a $100,000 penalty, and co-founder Pipitone received a $25,000 penalty.

Although the SEC did not mention which ‘meme stocks’ were prohibited from being purchased, GameStop and AMC have been the two biggest ‘meme stocks’.

I assume the third was Bed Bath & Beyond.

Source: SEC Press Release

Where are ‘meme stocks’ headed in 2022?

Meme stocks

AMC and GameStop continue to be heavily shorted.

While both companies have survived the pandemic and have shown a dramatic fundamental improvement, short sellers have not left.

Both these stocks have an extremely high short interest and shares on loan.

More and more retail investors are piling in these two stocks for a short squeeze play that was merely suppressed last year.

Trading was halted in both AMC and GameStop in late March of 2022.

AMC rose to $34 per share while GME stock rose to $199 per share.

This form of market manipulation continues today.

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Related: Ken Griffin Speaks Out on Retail Investors and Meme Stocks

Ken Griffin Attacks: “Pension Plans Destroyed by Retail Investors”

Ken Griffin on Retail Investors
Market News: Ken Griffin on retail investors

Ken Griffin accused the retail community of destroying teacher’s pension plans by taking down Gabe Plotkin’s Melvin Capital.

Melvin Capital is a hedge fund that was short on ‘meme stocks’ holding a large position in GameStop.

The company is scheduled to shut down in June after it had suffered a 50% loss in 2021, and an additional 20.6% in the first quarter of 2022.

Sources say Melvin Capital has already begun to liquidate its positions to pay back investors in cash.

In this Bloomberg exclusive, Ken Griffin plays a role of the victim, defending Mr. Plotkin and the hedge fund whose mission it was to bankrupt GameStop.

Ken Griffin’s Citadel is also short on AMC Entertainment – the hedge fund lost billions last year betting against retail.

Let’s discuss it.

franknez.com

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Let’s dive right into it!

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CNBC mourns the loss of Melvin Capital

CNBC says Melvin was one of the biggest victims from the meme stock frenzy last year due to its large short position in GameStop.

They say Citadel and Point72 had to provide Melvin Capital with a lifeline to stay above the water.

The hedge funds combined provided Gabe Plotkin with $2.75 billion in capital last year.

However, as things went south quick for Melvin, both hedge funds demanded the capital back.

Something Ken Griffin and his affiliates fail to mention.

Mainstream media has also danced around the fact that hedge funds planned to wipe American companies by overleveraging their short positions during the pandemic.

Success in doing so would delist AMC, GameStop, and other meme stocks from the stock market.

Betting against companies with intention to bankrupt them to the ground is no charity work.

It’s un-American and a nefarious practice that has dragged out for too long.

Ken Griffin blames retail investors

In the video below, Ken Griffin gives his thoughts on retail investors and the entire ‘meme stock’ phenomena.

Ken Griffin takes a jab at the retail community saying retail investors who aimed to bankrupt Melvin Capital also wiped-out pension funds from teachers.

But Ken, retail investors don’t get up in the morning and think to themselves, “let’s wipe out a multi-billion-dollar hedge fund.”

Melvin Capital lost because he went against retail – the first time in history the people fight back corruption in the stock market, and win.

Ken Griffin lost billions shorting AMC stock, the retail community is currently his biggest adversary.

AMC shareholders continue to buy and hold the stock until short sellers exit their positions, which will result in a short squeeze.

Today’s retail investors are armed with education, they understand what they hold and what it’s doing to hedge funds.

While Ken Griffin and affiliates might be pumping a narrative as victims, high profiles such as Elon Musk, Jon Stewart, and Ryan Cohen have stood up against short sellers.

For the first time in history, Wall Street is getting their a** kicked, and these hedge fund managers certainly do not like that.

Hedge funds should prepare for bigger losses

Institutions are about to lose a massive amount of collateral due to executive order 14032 in early June.

This presidential order is prohibiting Chinese securities to be used as collateral starting June 2nd, 2022.

It was responsible for initiating margin calls when AMC Entertainment stock rose to $20 per share in January, and $72 per share in June of last year.

With liquidity drying up in global markets, it’s going to be quite difficult for hedge funds to keep up with margin requirements on heavily shorted ‘meme stocks’.

Massive selloffs in the market have proved just how distressed financial institutions are.

We’re seeing for the first-time hedge funds begin to shut down as they take the lead in liquidity burn.

Retail investors have been the majority of buyers in today’s markets according to Bank of America.

Hedge funds are headed towards a larger train-wreck of disaster they cannot get off of.

As they continue to tank the markets, margin requirements go up thanks to DTCC B16845-22.

Hedge funds have lost control.

But I’m curious to know what you think.

Leave your thoughts in the comment section of the blog below.

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Hedge Fund Melvin Capital Is Shutting Down End of June

Hedge Fund Melvin Capital is Shutting Down End of June
GameStop short seller Melvin Capital is closing its doors this summer

Hedge fund Melvin Capital, notoriously known by the retail community for betting against GameStop is now closing its doors.

2022 marks the second year in a row the short seller underperforms.

Melvin Capital lost a staggering 20.6% the first quarter this year alone.

In 2021, they took a heavier hit with 50% in losses.

Now the hedge fund tells CNBC they will be shutting down by the end of June and starting a new company.

Let’s dive deeper.

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The apes were right

In March, I published a tweet asking the community whether Melvin Capital would be the next hedge fund to default.

We all saw this coming, but 90% of you voted YES.

Forward a month later and now the hedge fund is announcing it is closing this summer.

Earlier in March we saw another notorious hedge fund known for shorting GameStop pull $2 billion from Gabe Plotkin’s Melvin Capital.

That hedge fund was Citadel.

Citadel also lost billions last year shorting so called ‘meme stocks’, so it comes as no surprise as to why they pulled out from Gabe Plotkin’s Melvin Capital.

Ken Griffin’s Citadel also imposed tight restrictions on its clients leading into the new year.

Customers were given an ultimatum to either stay with the firm otherwise coming back would prove to be difficult.

Steve Cohen’s Point72 redeemed $750 million from Melvin Capital around the same time.

Ken Griffin received a $1.2 billion lifeline from partners Sequoia and Paradigm in January of this year.

This was the first time Citadel had ever received private funding.

Don’t bet against the apes

Mainstream media doesn’t give retail investors enough credit for shedding light on market injustices.

The ‘ape’ community has grown since last year as retail investors discover the short interest data that points towards a bigger AMC runup than that of January and May of last year.

In this video I go over patterns that are similar to those from last year’s runup and what we should keep a close eye out on.

The apes were right about naked shorting, dark pools, and the dangers of betting against retail.

Now hedge funds are dealing with the consequences of betting against the people.

Majority of the community continues to buy and hold ‘meme stocks’ such as AMC and GameStop in efforts to create a massive short squeeze.

Retail has said it many times, a short squeeze is inevitable.

While the SEC might be proposing rules that could wash naked short selling, yet avoid them in the future, it would take years to enforce if passed.

Will hedge funds survive?

Hedge funds are currently facing deep scrutiny from both retail investors and regulators.

The DOJ is taking Morgan Stanley, Goldman Sachs, and numerous other hedge funds to court.

Citadel is one of the short sellers currently being investigated by the Department of Justice according to a Bloomberg report.

The SEC and DOJ are looking into the following:

  • Communication between banks and hedge funds
  • Proof of ‘Bear Raids’
  • Spoofing
  • And several other market manipulation tactics

Hedge fund Muddy Waters was already raided by the FBI earlier this year for flooding the market with fake orders to drive stock prices down.

Melvin Capital is only one of many hedge funds that has closed down in the past year due to overleveraged short selling, and bad bets.

What are your thoughts on the Melvin Capital news?

Did you see it coming?

Leave a comment below.

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Ray Dalio’s Bridgewater Just Bought AMC Stock and Sold Tesla

Ray Dalio's Bridgewater Just Bought AMC Stock and Sold Tesla
BREAKING: Ray Dalio’s Bridgewater buys AMC stock for the first time; sells Tesla

Another institution has bought AMC stock and sold another high-profile stock.

Ray Dalio’s Bridgewater fund just bought AMC and GameStop and sold Tesla shares.

I was watching the multi-billionaire talk about the economy just yesterday with Tom Bilyeu.

Bridgewater wasn’t the only institution that increased their stake in AMC stock this first quarter.

The largest pension fund in America (CALPERS) purchased an additional 155,992 shares by the end of Q1 this year, totaling the number of AMC shares owned to 775,392 shares.

It seems institutions are bulking up on AMC shares right before executive order 14032 goes into effect.

Things are getting very interesting.

Let’s discuss it.

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Bridgewater buys AMC stock for the first time

Bridgewater buys AMC
Ray Dalio’s Bridgewater buys AMC stock for the first time

Bridgewater disclosed an AMC stake for the first time in its latest portfolio update.

Dalio and his team bought about 27,100 shares of the cinema chain, which were worth $667,000 at the end of March.

The fund disclosed around 4,100 GameStop shares worth $689,000 as of March 31.

The last time it listed GME stock in its portfolio was more than three years ago, at the end of 2018, according to Market Insiders.

Bridgewater owned about 25,500 Tesla shares worth $27 million at the end of December, and held the stock in all four quarters of 2021 but cashed out its Tesla stock the first quarter this year.

Ray Dalio is an incredibly smart person.

Why an institution like Bridgewater is bulking up on AMC and GameStop shares has to mean something.

The ‘ape’ community predicted the big price runups that happened in AMC last January and May/June and are expecting a bigger runup this year.

Are financial institutions catching up?

Executive order 14302 goes into effect soon

Executive order 14302 is going to prohibit financial institutions from using Chinese securities as collateral on June 2nd, 2022.

The last time Chinese collateral was prohibited on January 27th, and May 27th of 2021, AMC stock surged.

Is this why institutions such as CALPERS and Bridgewater are buying AMC stock?

And while CALPERS did not buy GME stock this first quarter, it did buy 70,600 shares of GameStop during the last quarter of 2021.

I wonder what Wall Street analysts have to say about this.

After all, they made it their life’s mission to derail investors from buying these ‘meme stocks’.

Something tells me ‘dumb money’ might not have been so dumb after all.

But I’m curious to know what you think.

Are institutions on board with the data that says AMC and GameStop have massive potential for a short squeeze?

Leave your thoughts in the comment section of the blog below.

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Related: CALPERS Increases AMC Stake, Sells Netflix Shares

Executive Order 14032 Could Be a Big Deal for AMC Stock

Executive Order 14032
Executive Order 14032 explained

Biden’s executive order 14032 replaced Trump’s executive order 13959 last year.

Executive order 13959 prohibited financial institutions to use Chinese securities as collateral, momentarily.

This propped up margin calls because of the large exposure our financial institutions have to Chinese securities.

When these securities were no longer accepted as collateral on January 27th, 2021, AMC stock surged.

The order was shortly amended (moved) to May 27th, 2021, where AMC stock had its second surge, reaching an all-time high of $72 per share only a few days after.

Biden then shortly passed executive order 14032 which gave institutions their collateral back for 365 days on June 2nd, 2021.

Well, those 365 days are coming to an end, and it seems June of 2022 could be a big month for AMC stock.

Let’s discuss it.

franknez.com

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No dates, only info

Executive order 14032 - executive order 13959

I’d like to make clear that the information provided in this article is merely only information backed by real government documents and data.

This excerpt is not to confirm a specific date where we can anticipate AMC stock to move up in price action, but rather acknowledge what’s happened in the past that could very well occur today.

Executive order 13959

Redditors were wondering whether there was a document that confirmed the replacement of executive order 13959.

And here it is – the order was replaced by executive order 14032.

One of the biggest differences between these two orders is that the previous executive order affected a total of 30 securities.

Executive order 14032 will affect more than 70 securities.

You can view the list of companies here.

Executive order 14032 is to go into effect on Friday June 3rd, 2022.

Will executive order 14032 trigger a short squeeze?

Given the nature of the rule, executive order 14032 will prohibit institutions to use Chinese securities as collateral, which will result in large margin calls.

When executive order 13959 disarmed institutions with this collateral in January of 2021, AMC surged to $20+ per share.

The order was amended as stocks surged resulting in sharp declines, giving institutions this collateral back.

The amended date moved to late May, where we saw AMC reach an all-time high of $72 per share.

Institutions were then given their collateral back on June 2nd for a period of 365 calendar days.

This collateral will no longer serve institutions on June 3rd until the order is amended again.

The expiration date in early June leads us to conclude we will see major short covering in heavily shorted securities such as AMC stock.

And because the list of Chinese securities being affected has increased, this means the amount of collateral that will be removed has also drastically increased.

If history repeats itself, this next surge will be massive.

That’s not even taking into consideration the next amended date.

Will this executive order lead to MOASS?

I’ve mentioned in previous articles I don’t think institutions will be held accountable for synthetics, but I hope I’m wrong.

One thing I do know is retail investors will need to keep an eye out on AMC’s short interest data to identify whether short sellers are calling it quits or sticking around longer.

No matter how high AMC’s price surges, the short interest data essentially provides investors with insight on how much fuel is left in a short squeeze play.

When AMC rose to $72 per share, the short interest had dropped to 16% from 20%.

AMC’s current short interest is 21.57%.

We’ve also seen that AMC short sellers have hit a record high number of shares on loan.

This means they owe more shares today, than they did AMC surged to $20 and $72 per share.

A third runup will be huge for AMC stock.

Only time will tell whether executive order 14032 is the catalyst or not.

Related: Are Institutions Preparing to Close Short Positions in AMC?

AMC is going to reach a new ATH

I believe AMC is going to reach a new all-time high from its previous record high of $72 per share.

Simply because the data is there.

The data that told us AMC was going to $20, then $72, and now even higher, is still there.

It’s just taking longer than traders would like.

But despite how long it takes, you can’t change the data.

You can’t change the fact that short sellers now owe lenders more than ever before.

And at some point, these lenders will need their money back.

Executive order 14032 seems like a highly likely trigger for AMC stock.

I’d love to hear your thoughts on the matter.

Leave a comment below for the community to see.

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Related: Will AMC Entertainment Stock Reach a New ATH This Year

AMC, GME Soar: Volume Proves There is a Massive Demand

AMC and GME
Market News: AMC and GME soar due to massive retail demand

AMC and GME soared Thursday morning as buy orders filled the market.

Both stocks were momentarily halted, though it seems GameStop had stricter halts.

AMC surged from $9.82 per share to $13.46 per share during the rally.

GameStop skyrocketed from $78.09 per share to $108.05 per share before getting halted.

Mainstream media boasted that retail investors were done with so called ‘meme stocks’.

But unless you’re in the community, you know this is a blatant corporate lie.

AMC and GME’s trading volume proves there is a massive demand for the stocks.

Let’s discuss it.

franknez.com

Welcome to Franknez.com – if you haven’t joined the newsletter, be sure to do that below. I’m publishing market news and updates daily.

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AMC is a top holding for Millennials and Gen Z investors

Market Rebellion says Tesla, Apple, and AMC are the top holdings of the average Millennial and Gen Z investor.

And while they are not wrong, they missed another generation, Gen X – also known as boomers.

The ape community is made up of many boomers.

In fact, I’ve talked to more boomers in the community than Gen Z investors.

Perhaps that’s just my circle, but I’ve been part of the community since its inception.

And every time the media published FUD headlines stating both AMC and GME plays were over, millions of people laughed.

AMC became the most popular stock of 2021 and continues to be the most popular stock in 2022.

And believe me when I say, retail investors aren’t leaving.

Related: Are You Holding Significant Losses in AMC Stock?

AMC and GME volume skyrockets as demand surges

AMC and GME

We saw a very similar occurrence in late March where both AMC and GME began to surge due to big buying volume.

But both stocks were halted, leaving retail investors extremely disappointed with the blatant market manipulation.

AMC climbed up to $34 per share while GameStop claimed $200 per share.

Retail investors didn’t leave then, and they’re not leaving now.

AMC’s current trading volume is more than double its average of 48.1 million.

GameStop’s is also more than double its average of 4.1 million.

We saw high buying pressure early in the market as the two ‘meme stocks’ took the lead and left corporate media pinched.

No matter how much mainstream media lies and says these two plays are dead, the truth is still the truth.

Both AMC and GME have incredible short squeeze potential, and the only thing keeping them from skyrocketing is open short positions.

Volume, however, could create big panic and set off a chain reaction enabling shorts to close their positions.

Short interest data

AMC and GME short interest

Just how AMC and GME’s high volume proves there is still a massive demand for the two stocks, the short interest proves these are short squeeze plays.

Both AMC and GME have very high short interest.

AMC short interest: 21.44% | GME short interest: 21.52%

Both these stocks have a record high number of shares on loan that have to get bought back and returned at some point.

Short sellers have their foot on a bouncy betty.

These stocks will squeeze whether shorts get out at their current share prices, lower, or even higher.

Because AMC and GME’s shares on loan are at an all-time high, this also means that when they do skyrocket, share prices will surpass their last record highs.

This is why people around the globe are buying these stocks.

The upside potential is too large to pass on.

When will these two stocks squeeze?

No one can say for sure.

But this bear market could prove to be a great time for shorts to close their positions, at least while stocks are at temporary low.

Related: Are Institutions Preparing to Close Short Positions in AMC?

Are you holding AMC and GME stock?

What are your thoughts on the current market conditions?

Is now a good time for short sellers to cover or do you think the market is still trying to find a floor?

I’d love to learn what you think.

Leave your thoughts in the comment section below for the community to read.

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Is AMC’s Real Share Price Being Hidden?

Is AMC's Real Share Price Being Hidden

Retail investors have debated whether AMC’s real share price has been hidden from the public for over a year now.

Why would anyone question a stock’s price?

Before the ‘conspiracy theorist’ alarm starts going off in your head, know this.

Every time mainstream media called the retail community conspiracy theorists, data and news was released confirming retails claims.

Such claims included naked shorting, dark pool trading, and major conflicts of interest in the market.

So, are these glitches that show AMC trading in the hundreds of dollars per share merely glitches?

Or is there more going on that retail can’t see?

Let’s discuss it.

franknez.com

Welcome to Franknez.com – if you haven’t joined the newsletter, be sure to do that below. I’m publishing market news and updates daily.

Let’s dive right into it!

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Is AMC’s share price real?

is AMC's share price real - real amc share price

Retail investors have debated that because so much of retails orders do not get processed in the lit exchange (NYSE), not all of their buying power is being reflected in the actual share price.

Gary Gensler himself said 90%-95% of retails orders are processed in dark exchanges during a Bloomberg exclusive.

This provides concrete evidence AMC’s share price is heavily suppressed.

And heavy overleveraged short selling doesn’t make it any better.

If the SEC has proved one thing, it’s that the stock market is tailored to better fit the needs of financial institutions rather than individual retail investors and the companies that are the backbone of our economy.

Saying AMC’s real share price is being hidden is a strong way of saying institutions are stealing money from retail investors.

But where’s the lie?

When market makers make money trading retail’s orders through foreign exchanges while regulators allow this to happen.

Is AMC’s real share price being hidden?

It’s safe to say retail investors understand AMC’s real share price is definitely being suppressed.

AMC share price glitches

AMC Share price glitches

Evidence has surfaced on Reddit and Twitter showing AMC at a higher share price than is being traded on the NYSE.

These glitches have surfaced for over a year now where AMC has been seen trading between $100-$400 per share momentarily.

These discrepancies in the market have left retail investors wondering if AMC’s real share price has been accidently leaked from time to time.

To keep an open mind is to ask questions and to get down to the truth, whether these glitches truly are just glitches, or not.

Similarly, glitches have also surfaced for GameStop (GME) stock.

The ‘meme stock’ duo have been victims of heavy shorting for years now but market injustices have been brought to light by the ‘ape’ community in the past year.

Mainstream media won’t touch topic on these issues which is why I’ve made it my mission to stand up for the community.

I’m interested in learning your perspective.

Leave your thoughts in the comment section down below.

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Related: Will AMC Entertainment Stock Reach a New ATH This Year

SEC News: New Proposals Threaten MOASS and Market Justice

SEC News
SEC News – NSCC 2022 003 – NSCC 2022 801

Today I’m going to touch topic on some SEC news.

Be sure to bookmark this page as it will be continuously updated for your convenience.

The SEC recently released two new rules that essentially go hand-in-hand with one another.

They are NSCC-2022-003 and NSCC-2022-801.

I’ll be breaking these down in simple terms below.

franknez.com

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NSCC-2022-003 and NSCC-2022-801

SEC

NSCC-2022-003 and NSCC-2022-801 essentially have to do with allocating securities into other pockets of leverage through the use of SFTs.

I’ve seen a few mixed thoughts on this SEC news on Twitter and on Reddit.

However, I’m going to break it down in the simplest form possible, so you have a better understanding of what these new SEC proposals are stating.

If you have any comments, thoughts, or opinions you’d like to make public to the community, be sure to leave a comment below at the end of the article.

What is an SFT?

An SFT is basically a leverage tool that will allow parties to simultaneously exchange the same securities between one another, in exchange for collateral.

For example, the purpose of NSCC-2022-801 is to establish new ‘membership categories’ and requirements for ‘sponsoring members’ and sponsored members where they can access this leverage tool.

It’s a safety net for institutions with overleveraged positions to hold owed securities, but ensures sales are delivered in the market, preventing FTDs and naked shorting.

SFTs involve the owner of securities transferring those securities temporarily to a borrower, typically a hedge fund.

The middleman in this scenario tends to be either a bank or a financial firm.

In return for the lent securities, the borrower of those securities transfers collateral to a party with an interest rate attached to that collateral.

SFTs in a nutshell are meant to provide liquidity to markets to make delivery on short-sales, and avoid FTDs, naked shorts, and similar situations, according to the report.

Will these rules benefit retail investors or hedge funds?

SFTs can also be seen as a program that will allow the NSCC to liquidate a defaulter’s net position in an orderly way to prevent massive market disruption.

NSCC-2022-003 limits the positions that need to be liquidated to reduce the volume of required sales activity in the market.

What regulators have essentially created is a ‘legal’ backdoor for overleveraged hedge funds to launder illegal naked short sells and FTDs.

NSCC-2022-003 and NSCC-2022-801 are essentially the same proposals only with slight updates.

Keep in mind these are only proposals.

So, while these new rules could be beneficial to retail investors as far as eliminating naked short selling in the future, it washes away the damage already created by overleveraged hedge funds today.

I strongly believe short sellers should be held accountable to closing their overleveraged positions first.

If the SEC wants to protect the integrity of the market and prevent massive disruption worldwide, they will hold short sellers accountable, relieving all pressure imposed on heavily shorted stock.

Failure to do so will mark the event as the greatest financial theft in stock market history.

We are on the brink of massive change.

History is being written; one of two decisions will be made, and the outcome will last forever.

SEC Email: rule-comments@sec.gov

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DTCC Makes Plans to Implement T+1 in 2024

T+1

The DTCC just announced they play to implement T+1 in the year 2024.

On February 9 the DTCC held a meeting to change the trading cycle from T+2 to T+1.

But is this change too far out?

I’m going to break down the benefits of T+1 as well as what the DTCC has to say regarding the lengthy time.

Also, what T+1 would mean for AMC and GME shareholders.

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What is T+1?

T+1, T+2, and T+3 refer to the number of days it takes for a security to settle after it has been traded.

T+1 means that if a transaction occurs on a Monday, settlement must occur by Tuesday.

Likewise, T+3 means that a transaction occurring on a Monday must be settled by Thursday.

We are currently on T+2 and have been since 2017.

So, what is T+0?

T+0 is a shortened settlement cycle where trades are settled the same day of transaction.

The DTCC recently argued that T+0 is rather complicated to achieve at the moment and is nearly impossible today due to how many orders flood the market daily.

They commented that as T+1 is implemented, they will monitor its progress to see how they may accommodate to T+0 at some point in the future.

When will T+1 happen?

DTCC T+1

The DTCC and SEC have established that T+1 will occur during the first or second quarter of 2024.

The DTCC is in favor of making this change in the first quarter of 2024 while the SEC feels like they will need more time and would like T+1 to go into effect during the second quarter.

T+1 is certainly a step forward; however, retail investors feel like this settlement day should be implemented sooner.

The DTCC and SEC agree that the process to implement this settlement day will require time.

Regulators have acknowledged that systemic risks may surface due to delayed settlement days, such as our current T+2.

Let’s talk about the risks of delays settlement trades.

Risks of T+2

Momentum stocks, also known as ‘meme’ stocks, proved last year when just how risky delayed settlement trades were when Robinhood ran out of liquidity to meet customer demands.

Robinhood is notoriously known for restricting retail investors from purchasing AMC, GameStop, and other ‘meme stocks’ due to liquidity issues.

The problem began due to delayed settlement trades.

So many orders were being processed and registered that by the time they were settled, liquidity had run dry forcing Robinhood to halt trading of these specific stocks.

The only problem here is that market makers are responsible for providing liquidity to broker firms such as Robinhood.

Robinhood makes money by sending retail orders to one of the biggest market makers in the world, Citadel.

Citadel at the time was losing billions from betting on AMC and GameStop.

This is where the Citadel and Robinhood scandal started, the day a losing market maker colluded with the broker to halt trading in order to prevent further losses.

Could T+2 be used as a copout for what occurred last year during the halts?

Be sure to leave a comment at the end of the article.

How would T+1 affect AMC and GameStop?

T+1 would not only affect AMC and GameStop, but it would ensure every stock in the market is settled one day after the purchase.

It would eliminate room for market makers to create naked shares during the settlement delay.

According to the SEC, in a “naked” short sale, the seller does not borrow or arrange to borrow the securities in time to make delivery to the buyer within the standard two-day settlement period

T+3 was removed years after the 08 crisis.

Now T+2 is scheduled to be removed three years after the ‘meme stock’ frenzy.

The change retail has been wanting to see is going to happen, but it’s going to take time.

As settlement trades get shortened, we can expect to see less risk in the market and less market manipulation.

Of course, there are still many predatorial strategies in the market that must be addressed.

Some of which include dark pool trading, off exchange trading, and short and distort campaigns where short sellers and media collude to drive the price of a stock down.

Related: How do hedge funds manipulate the stock market

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