Tag: Hedge Fund News (Page 1 of 6)

Credit Suisse Stock is Now in Danger of Delisting

Market News Daily - Credit Suisse Stock is Now in Danger of Delisting.
Market News Daily – Credit Suisse Stock is Now in Danger of Delisting.

Credit Suisse (NYSE:CS) stock is now in danger of delisting from the New York Stock Exchange as it fails to meet the exchanges minimum price criteria.

“The New York Stock Exchange notified Credit Suisse on May 1… that it is no longer in compliance with the NYSE’s continued listing minimum price criteria,” Credit Suisse said in a statement end of the month.

Credit Suisse stock is currently down more than -73% this year-to-date, currently trading at $0.82 per share.

Under NYSE rules, shares must trade for at least $1.00 for 30 consecutive days to qualify for listing.

“Credit Suisse expects that the deficiency will be cured upon completion of the acquisition by UBS,” which will mean its own shares are exchanged for UBS stock and delisted in New York, the statement said.

“Upon consummation of the acquisition, UBS will be the surviving entity.

In connection with the acquisition, Credit Suisse’s ordinary shares underlying its American Depositary Shares will be exchanged for the right to receive a fraction of a UBS ordinary share and as a result delisted from the NYSE.”

In April, Credit Suisse Investors said they wanted the board of directors in jail after they blocked executive pay plans during the final ever annual meeting.

According to The Guardian, shareholders used most of the nearly five-hour annual general meeting in Zurich – the last in the 167-year-old bank’s history – to voice fury over poor management, hitting out at excessive pay for “incompetent and greedy” bankers who they said took too many risks and endangered Switzerland’s economic prosperity.

In November of 2022, the bank warned investors in a 6-K filing of potential losses due to naked short covering.

Credit Suisse took a massive hit of $4.09 billion in Q3 and hinted at occurring losses in an upturn in markets.

The bank hired 20 banks for a $4 billion injection in effort to pivot from Q3’s disaster and also postponed publication of its annual report earlier this year, per Reuters.

Credit Suisse Bankers Resign by the Hundreds

Market News Daily - Credit Suisse Stock is Now in Danger of Delisting.
Market News Daily – Credit Suisse Stock is Now in Danger of Delisting.

Bankers at Credit Suisse are quickly throwing in the towel as hundreds of resignations hit the distressed bank.

Swiss newspaper Blick reported earlier on Wednesday that each day around 150 people worldwide were resigning from Credit Suisse while one of the two people said they saw about 200 resignations a week.

Credit Suisse bankers, worried about their future are seeking safer employment at competitors, one person said.

People familiar with the matter declined to be named because they are not authorized to speak publicly, per Reuters.

UBS (NYSE:UBS) agreed on March 19 to take over its smaller Swiss rival as part of a rescue arranged by the Swiss authorities after a bout of market turmoil brought the struggling lender to the brink of collapse.

Credit Suisse said in April that the bank’s “employee attrition has been higher over the last year,” and that it had just over 48,000 full-time employees at the end of the first quarter and reported 50,480 full-time staff at the end of 2022.

UBS management has also said it would set a “very high bar” when deciding whether to retain any of Credit Suisse’s investment banking staff.

Similarly, about 1,000 First Republic (OTCMKTS:FRCB) employees have lost their job across all of First Republic’s businesses after the JPMorgan takeover.

UBS has said it plans to wind down Credit Suisse’s investment bank, which employs about 17,000 staff, and the Swiss state has pledged 9 billion Swiss franc in guarantees to cover potential losses from the operation.

No day passes without receiving a goodbye email from someone across the bank, one of the two people said.

At the investment bank, calls are often unanswered, he added.

Market News Published Daily

Market News Today - Credit Suisse Stock is Now in Danger of Delisting.
Market News Today – Credit Suisse Stock is Now in Danger of Delisting.

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DOJ Says More Companies Are Disclosing Illegal Activity

Market News Daily - DOJ Says More Companies Are Disclosing Illegal Activity
Market News Daily – DOJ Says More Companies Are Disclosing Illegal Activity

The Department of Justice (DOJ) says more companies are voluntarily disclosing illegal activity after the department upped rewards for doing so.

Assistant Attorney General Kenneth Polite Jr. said the criminal division has already seen an increase in the number of corporate disclosures since the announcement of an expanded policy.

Under the policy, companies that disclose wrongdoing to the Justice Department, fully cooperate and fix underlying problems are eligible for discounts on financial penalties or even a promise that prosecutors won’t bring a case altogether.

Polite said the criminal division is also looking into increasing visibility into its enforcement actions, including in how it selects monitors in settlements and how and when it charges individual executives. 

“At the end of the day, chief compliance officers have to be one of the voices that sign off on these resolutions,” he said.

“What you’re hoping to see is moving away from the CCO or compliance division being siloed.”

Deputy Attorney General Lisa Monaco last year said she was directing other components of the Justice Department to create their own self-disclosure policies, as part of an effort to increase investigations into corporate crime.

In an announcement earlier this year, Polite said the criminal division would formally expand the fraud section’s self-disclosure program to apply to other types of white-collar crime, per WSJ.

Today, retail investors are looking for solutions to the daily manipulation seen in the markets as stocks tank despite healthy buying pressure.

SEC Issues Record Breaking $279 Million Whistleblower Award

Market News Daily - DOJ Says More Companies Are Disclosing Illegal Activity
Market News Daily – DOJ Says More Companies Are Disclosing Illegal Activity

In May, the Securities and Exchange Commission said it awarded nearly $279 million to a whistleblower who helped the regulator and other agencies bring enforcement actions, the biggest award ever.

Under SEC rules, a whistleblower can receive an award of between 10% and 30% of the fines collected in SEC civil-enforcement actions and related actions from other enforcement agencies resulting from a tip, assuming the SEC collects more than $1 million.

The whistleblower voluntarily provided original information to the SEC that led to a successful enforcement action by the regulator as well as two related actions, according to the award order. 

Although the SEC said it already had opened a probe of the unnamed company and its staff were aware of potential misconduct there, the agency credited the whistleblower’s information with expanding its probe and for providing ongoing assistance through written submissions and interviews.

The SEC said it also determined that related actions by other agencies were based in part on the same information provided by the whistleblower, who also provided it to another unnamed agency.

The cooperation with other agencies and their subsequent enforcement actions increased the award amount.

“This award will have a massive chilling effect on Wall Street frauds,” said whistleblower attorney Stephen M. Kohn, who isn’t involved in the case.

While the DOJ says more companies are disclosing illegal activity, it looks like the same can be said about the SEC.

Retail investors call for high profile companies such Citadel for a deep investigation surrounding their long history of market manipulation.

Read: Citadel Draws Fresh Scrutiny from SEC in New Risky Bets

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Market News Today - DOJ Says More Companies Are Disclosing Illegal Activity
Market News Today – DOJ Says More Companies Are Disclosing Illegal Activity

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Mullen Short Interest Surges to New Highs This Week

Market News Daily - Mullen Short Interest Surges to New Highs This Week.
Market News Daily – Mullen Short Interest Surges to New Highs This Week.

Mullen Automotive’s (NASDAQ:MULN) short interest has surged to new highs starting this week.

Ortex is reporting a high short interest of 24.46%, now higher than that of AMC Entertainment’s or GameStop’s short interest data.

Market analyst and portfolio manager of the Omnia Portfolio, Tom Yeung predicted a MULN short squeeze last week.

“Mullen’s recent short-share order imbalance should have short sellers worried.

We’ve seen this story before in other meme stocks.

And the most dangerous thing to assume is that this time is any different,” says Yeung.

“Mullen has a hyperactive options ring that can contribute to a gamma squeeze.

Speculators buying call options generally cause market makers to buy an offsetting leveraged long position in the stock, which means every $1.00 invested in options is much like buying $10 of shares.

That means a short squeeze in Mullen could send shares up anywhere from the $2 range to the $5 range, depending on how many retail investors suddenly hop on board and assuming a squeeze happens in the first place.”

Mullen’s cost to borrow has topped at 250% this week as well, incentivizing short-covering as the cost to borrow the stock rises.

AMC stock rose more than 3,000% when shares rose to their all-time high of $72.

Short interest at the time had dropped from 22% to 14% as share prices soared.

Will MULN Stock Squeeze?

Market News Daily - Mullen Short Interest Surges to New Highs This Week.
Market News Daily – Mullen Short Interest Surges to New Highs This Week.

As we’ve seen with both AMC Entertainment (NYSE:AMC) and GameStop (NYSE:GME), it’s heavy buying pressure that created a chain reaction of short positions closing all at once.

This is what we’ll need to see from shareholders if we’re to ever see a MULN short squeeze.

The chief investment analyst in a small family office registered in Singapore says that Mullen Automotive should only be seen as a speculative trade for the probability of a ‘short squeeze‘.

“In my opinion, MULN stock can only be a speculative instrument for short-term trading – the only serious risk to my Sell rating is the percentage of shares outstanding sold short.

If MULN experiences even the slightest positive news or the company’s CEO goes public again with a loud statement like the one about solid-state batteries, the stock will most likely experience a strong short squeeze.”

But Mullen Automotive does seem to have something up its sleeves — at least that’s what Global EV Technology founder Lawrence Hardge is leading investors to believe.

Hardge took it to Facebook to confirm new and exclusive details on the Mullen-Saudi deal.

Hardge says his team has been in Saudi Arabia negotiating the final details of the $10B Saudi deal and that they have been finalizing territories.

He also stated that revenues from the Saudi deal would be 10x what Mullen is currently making from its vehicles and commercial program including the $279 million in orders from Randy Marion, and also confirmed they will be building a new battery manufacturing facility under MAEO in the US probably in Indiana or Michigan near to where Mullen already has established facilities. 

Latest MULN Stock News

Stock Market News Today - Mullen Automotive.
Stock Market News Today – Mullen Automotive.

Mullen Automotive announced last week that it has partnered with NRTC Automation for Class 3 assembly and production.

The Class 3 EV truck is scheduled to begin production sometime in July of this year at Mullen’s Manufacturing Center in Tunica, Mississippi.

Mullen’s manufacturing group has partnered with NRTC Automation (“NRTC”) out of Birmingham, Alabama, for Class 3 assembly line installation and integration, which includes all robotics and automation systems for vehicle production.

Recent capital expenditures in Tunica include addition of Automated Guided Vehicles to transport vehicles through assembly stations in the plant, installation of robotics, water test booth and end-of-line diagnostics.

NRTC will support Mullen’s Class 3 operation through launch and also provide ongoing support of the production as Mullen ramps up to meet the full market demand from its commercial customers.

The headcount at the Tunica facility has grown steadily in anticipation of vehicle production. Mullen recently announced the hiring of an additional 35 plant staff to support production start of the Class 3 vehicle program.

Mike Vagi, president of NRTC Automation, said, “Working with Mullen’s team from the beginning of this project, and to be a key team member responsible to bring the Mullen THREE to market is a role that we take very seriously.”

Read: Mullen Announces Successful 2023 Commercial Drive Event

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Market News Today - Mullen Short Interest Surges to New Highs This Week.
Market News Today – Mullen Short Interest Surges to New Highs This Week.

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SEC Answers to Denying Whistleblower Award in New Court Session

Market News Daily - SEC Answers to Denying Whistleblower Award in New Court Session.
Market News Daily – SEC Answers to Denying Whistleblower Award in New Court Session.

The Securities and Exchange Commission (SEC) is answering to denying a whistleblower award in a new court session.

An appeals court upheld the U.S. Securities and Exchange Commission’s decision to deny a whistleblower award in a case involving short seller Carson Block, while at the same time broadly questioning how the agency decides who receives awards from its cash-for-tips program. 

Last year, the Justice Department targeted Muddy Waters for flooding the market with fake orders, also known as ‘spoofing’.

Founder of Muddy Waters, Carson Block was served with a search warrant by an FBI agent.

The ongoing investigation was one of the many probes targeting hedge funds for illegal short selling strategies at the time.

Claimant Jamie Doe filed a whistleblower award application with the SEC, claiming to be a principal author of a 2011 report published by equity research firm Muddy Waters that contained information of the alleged misconduct.

His application was denied by the agency even though the SEC order cited the report in its investigation and settlement and credited Doe as an author of the report.

The SEC said Doe failed to provide the information directly to the SEC as the staff found the public report themselves, disqualifying Doe as a whistleblower. 

The Third Circuit decision on Friday agreed with the SEC’s decision, saying the appellant failed to demonstrate the SEC acted arbitrarily in concluding his application failed to meet the whistleblower requirements.

The award was instead given to Kevin Barnes, the direct informant in the case.

Hedge Fund Planned Whistleblower Scheme

Market News Daily - SEC Answers to Denying Whistleblower Award in New Court Session.
Market News Daily – SEC Answers to Denying Whistleblower Award in New Court Session.

To complicate matters, Muddy Waters’ CEO planned this whistleblower event only to get sued by his accomplice in the end.

Kevin Barnes, a private investor, last year sued Carson Block in New York federal court, saying that the two men worked together in producing the research that ultimately led to the SEC award and that they agreed to share proceeds from legal or regulatory actions stemming from their research, The Wall Street Journal previously reported.

Barnes is seeking $7 million from Block.

Cason Block is suing Barnes for defamation claiming he has suffered damages of more than $75,000.

A magistrate judge in the Texas case suggested in March the case be dismissed, to which Block objected.

The New York case is pending.

“Mr. Barnes looks forward to continuing his meritorious claims against Mr. Block for breach of their partnership agreement in the ongoing Southern District of New York matter.

Mr. Barnes will not be dissuaded by spurious accusations in improper venues,” Evan Fried, an attorney at law firm Slarskey who is representing Barnes, said in an email. 

Read: Citadel Draws Fresh Scrutiny from SEC in New Risky Bets

Other SEC News Today

Bankers are urging the SEC to looking into manipulative trading, particularly into abusive short selling.

Earlier this month, Reuters reported that the White House had vowed to monitor the possibility of illegal short selling as shares in the banking sector plunged.

Now The American Bankers Association on is urging federal regulators to investigate significant short sales of publicly traded banking equities that it said were “disconnected from the underlying financial realities.”

Retail investors are raising concerns over the banking sector’s requests, stating that the SEC should address manipulative trading practices in individual company stocks too, not just within the banking sector.

“We urge the SEC to consider all its existing tools and to take measures to reduce the avenues for abusive trading practices and restore investor confidence,” the banking group said.

“These measures include, at a minimum, a clear message and appropriate enforcement actions against market manipulation and other abusive short selling practices.”

Days after White House press secretary Karine Jean-Pierre said President Biden’s administration was looking into short seller activity around bank shares in the United States, triggering predictions of a possible ban, JPMorgan CEO has expressed his view that short-selling of bank stocks should, indeed, be prohibited.

Specifically, Jamie Dimon believes that regulators “vigorously” go after unscrupulous short-sellers, or anyone doing anything wrong in terms of stock options, derivatives, and short-sales, as he told Bloomberg TV anchor Francine Lacqua in an interview published on May 11.

You can read his entire take here.

Market News Published Daily

Market News Today - SEC Answers to Denying Whistleblower Award in New Court Session.
Market News Today – SEC Answers to Denying Whistleblower Award in New Court Session.

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Barclays CEO Says Banks Will Continue to Tank the Markets

Market News Daily - Barclays CEO Says Banks Will Continue to Tank the Markets.
Market News Daily – Barclays CEO Says Banks Will Continue to Tank the Markets.

Barclays (NYSE:BCS) CEO C.S. Venkatakrishnan says banks will likely continue to tank the markets as banks look to adjusting business models and “sell portfolios to cure themselves”.

He added that the acute crisis has passed but that many banks will be forced to change their business models—including possibly by curtailing lending.

“I think the phase of initial discovery is over and I think there’s going to be a little bit of a longer-term discovery and adjustment,” he said.

“I think as a systemic risk, it’s over,” UBS Chairman Colm Kelleher said at The Wall Street Journal CEO Council Summit in London last week.

“What’s not been solved yet is what is the funding model that will work going forward.”

Data released Wednesday showed U.K. inflation rose to 6.9% on an annual basis, its highest level since 1992, fueled by higher wages and corporate profits, per WSJ.

“Many of the other banks may not have an asset problem to the degree that Silicon Valley Bank or First Republic had,” said the Barclays CEO.

“But they have a problem which is bigger than they would like. So, they’re looking to sell portfolios and they’re looking to cure themselves and what that will probably mean is less lending.”

Less lending and more price drops in the markets.

Barclays stock is down more than -2% this year-to-date.

Other bank stocks like Bank of America are down more than -15% this year-to-date with PacWest currently down more than -68%.

Many retail favorites are down between 80%-90%.

Is There a Banking Crisis?

Market News Daily - Barclays CEO Says Banks Will Continue to Tank the Markets.
Market News Daily – Barclays CEO Says Banks Will Continue to Tank the Markets.

Banks are running out of liquidity and are cutting back thousands of jobs globally this year.

The US bank’s latest job cuts will hit 3,000 roles globally across most of its key divisions, as it embarks on its second round of redundancies within the space of six months, says FinancialNews London.

Morgan Stanely (NYSE:MS) recently cut around 70 dealmakers in Europe; the latest round of layoffs to hit the Wall Street bank this week.

Managing directors within its investment banking and global capital markets teams in Europe, the Middle East and Africa were informed of job cut decision earlier this week on Monday according to people familiar with the matter.

At the senior level, approximately 10 managing director dealmakers were cut in the region, the people added.

In January, Morgan Stanley’s rival Goldman Sachs laid off more than 3,000 employees and cut executive salaries.

Bank layoffs will continue throughout the year.

The latest 1,000 bank employee layoff by JPMorgan (NYSE:JPM) has creating panic in the banking industry.

About 1,000 First Republic (OTCMKTS:FRCB) employees have lost their job across all of First Republic’s businesses, per Financial Times.

“The cuts are a further blow to First Republic employees, who have already had a challenging two months.

Within the next 30 days, JP Morgan will notify First Republic employees of their job status, and not everyone will be offered a position with the bank.

Bank Accounts Are Being Frozen

On top of bank layoffs and banks having to continue selling portfolios, customer accounts are also being frozen.

JPMorgan is freezing customer bank accounts in the latest bank scandal.

Republican attorneys general from 19 states say the bank is “persistently” discriminating against its own clients and closing bank accounts without warning.

The law enforcement officials, led by Kentucky Attorney General Daniel Cameron, sent a letter to JPMorgan CEO Jamie Dimon stating that the banking giant’s practices go against the company’s own policies on equality, per Business Insider.

The letter, which has now been published by the Wall Street Journal, states that JPMorgan has repeatedly discriminated against customers based on their religious or political beliefs.

“It is clear that JPMorgan Chase & Co. (Chase) has persistently discriminated against certain customers due to their religious or political affiliation.

This discrimination is unacceptable.

Chase must stop such behavior and align its business practices with the anti-discrimination policies that Chase proclaims.”

The New York City (NYC) Banking Commission said on Thursday it is freezing new bank deposits at Capital One (NYSE:COF) and KeyBank.

Following the first-ever public hearing held by the New York City Banking Commission on Thursday, all three members voted to freeze deposits at Capital One and KeyBank after the banks failed to submit required plans demonstrating their efforts to root out discrimination.

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Market News Today - Barclays CEO Says Banks Will Continue to Tank the Markets.
Market News Today – Barclays CEO Says Banks Will Continue to Tank the Markets.

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1 Million Investors Have Now Enrolled in AMC’s Investor Connect

Market News Daily - 1 Million Investors Have Now Enrolled in AMC's Investor Connect.
Market News Daily – 1 Million Investors Have Now Enrolled in AMC’s Investor Connect.

AMC Entertainment (NYSE:AMC) CEO Adam Aron announced that 1 million investors have now enrolled in AMC’s Investor Connect.

Launched in 2021, Investor Connect lets AMC shareholders self-identify through the company’s website to receive special offers and company updates.

“ONE MILLION PEOPLE have now enrolled as members. While I get a few hate messages, AMC is SO fortunate to have passionate retail investors with us. TY, TY, TY!” said Adam Aron on Twitter.

AMC Entertainment announced in early May the movie theatre chain beat Wall Street expectations for its first quarter results.

“Our results for the first quarter of 2023 represent AMC’s strongest first quarter in four full years.

We kicked off 2023 by continuing on our positive glide path to recovery, with more than a 21% growth in total revenues and a $69 million improvement in Adjusted EBITDA compared to the previous year.

The first quarter of 2023 and fourth quarter of 2022 mark the first two consecutive quarters of EBITDA since March of 2020.

This progress is a testament to the ongoing recovery in the industrywide box office, as well as AMC’s enduring commitment to the excellence and innovation as our guests enjoy a superb movie-going experience at our theatres,” said AMC CEO Adam Aron.

AMC Entertainment stock is currently up more than +18% this year-to-date.

Macquarie Analyst Expects to See Big Growth In AMC

Market News Daily - 1 Million Investors Have Now Enrolled in AMC's Investor Connect.
Market News Daily – 1 Million Investors Have Now Enrolled in AMC’s Investor Connect.

Macquarie Analyst Chad Beynon expects to see big growth in AMC Entertainment.

“We expect AMC’s business to grow with the market and benefit from strong flow-through given significant fixed costs in the business,” the analyst predicted.

The analysts with Macquarie Research anticipate that domestic industry box-office revenue will reach $8.7 billion in 2023.

If that happens, it will represent a 19% year-over-year improvement. 

“Road to recovery getting better with box-office strength,” said Macquarie Research analyst Chad Beynon.

“Overall, AMC is highly optimistic about film volumes recovering to pre-pandemic levels over the next few years, supported by growing theatrical aspirations from the likes of Amazon and Apple,” he continued.

The analyst firm also pointed to concession spending at AMC, with first-quarter food and beverage spending per person hitting an all-time high of $7.99, a 50% increase over 2019.

Also Read: Hedge Fund Opposes AMC Proposals in New Letter to Court

Market News Published Daily

Market News Today - 1 Million Investors Have Now Enrolled in AMC's Investor Connect.
Market News Today – 1 Million Investors Have Now Enrolled in AMC’s Investor Connect.

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Citadel Draws Fresh Scrutiny from SEC in New Risky Bets

Market News Daily - Citadel Draws Fresh Scrutiny from SEC in New Risky Bets.
Market News Daily – Citadel Draws Fresh Scrutiny from SEC in New Risky Bets.

Citadel amongst other hedge funds is under fresh scrutiny from the SEC due to risky bets that are heightening systemic risk in an already shaky economy.

Officials at the Securities and Exchange Commission and the Federal Reserve have questioned prime brokers about leveraged trading as “the dangers have been heightened due to political brinkmanship around the debt ceiling that has threatened to sink the US into default and unleash chaos in financial markets”, per Bloomberg.

“Several of the hedge funds that have recently pursued the so-called basis trade were also active in 2020, when the outbreak of the pandemic upended the Treasury market and caught them wrong-footed until Fed officials intervened to restore normalcy.”

Basis trading is a trading strategy that seeks to profit from perceived mispricing of securities, capitalizing on small basis point changes in value.

The list includes Citadel, Millennium Management, ExodusPoint Capital Management and Capula Investment Management, according to people familiar with the matter.

“Opaque and risky, the strategy has long spooked watchdogs. It involves borrowing heavily in the repurchase market and using that leverage to exploit the price gap between Treasury futures and the underlying cash market.

The trades, in some cases, have been levered 50-to-1, according to two of the people,” says Bloomberg.

The strategy’s popularity is alarming to SEC Chair Gary Gensler, who is on a mission to subject large speculators to more regulations.

“There’s a risk in our capital markets today about the availability of relatively low margin — or even zero margin — funding to large, macro hedge funds,” said Gensler, in response to a Bloomberg News inquiry about the rise of the investing style.

The Fed Has Gotten Involved

Market News Daily - Citadel Draws Fresh Scrutiny from SEC in New Risky Bets.
Market News Daily – Citadel Draws Fresh Scrutiny from SEC in New Risky Bets.

The New York Fed said in a statement that it “regularly reaches out to a wide range of market participants to gather information on financial market developments, and this outreach is consistent with typical market intelligence gathering.” 

Officials have been asking about current margin requirements and how a default, or a downgrade to the US’s credit rating, would impact the market plumbing including the value of collateral, the people said. 

“Financial watchdogs are under pressure after having been blindsided repeatedly by instability in the bond market since the pandemic erupted”, says Bloomberg.

Fed officials at the policy meeting earlier this month expressed concerns about the risks lurking outside the banking system in light of recent financial stresses. 

Minutes released Wednesday singled out “hedge funds, which tend to use substantial leverage and may hold concentrated positions in some assets with low or zero margin.”

This means hedge funds such as Citadel and Millennium have been able to short the markets with unlimited leverage and low to zero margin to hold them accountable for any particular losses.

The question is why have regulators allowed this risky strategy to occur in the markets for too long.

Hedge funds such as Citadel have been targeting small cap companies in efforts to profit big from the possibility of bankruptcy.

The hedge fund recently became known for shorting and capitalizing from a cancer research company.

Northwest Biotherapeutics sued Citadel for market manipulation entering the new year.

Will Anything Be Done About Citadel’s Risky Bets?

ExodusPoint and Capula were caught out while Millennium closed several so-called trading pods in the crisis.

“For Citadel, the impact was smaller. The firm’s current positioning in the trade isn’t the largest it’s been historically,” one of the people told Bloomberg.

Representatives for Citadel, Millennium, ExodusPoint and Capula declined to comment on their current exposures.

The increase in short-futures positions by hedge funds that use massive leverage is hitting records.

“That’s a sign speculators are seeking to profit from a mismatch in pricing between Treasury futures and the cash market. Since the strategy typically yields minuscule returns, hedge funds borrow in the repo market to amplify gains,” says Bloomberg.

A new intraday margin call rule is hitting Wall Street hard as the SEC plans to bolster the resiliency and integrity of the market.

The U.S. Securities and Exchange Commission last week voted on the proposal that would require clearing houses to monitor margin exposures on an ongoing basis and give them the authority to make intraday margin calls as frequently as circumstances warrant, per Reuters.

The new intraday margin call rule was inspired by the ‘meme stock’ frenzy of 2021.

Specifying the ongoing monitoring of intraday exposure, and under what circumstances intraday margin calls would be made, would strengthen clearing houses’ risk management and give greater transparency around how they manage intraday risk, the SEC said.

“Intraday margin calls have been important in our markets just in the recent past,” SEC Chair Gary Gensler said during a SEC open meeting ahead of the vote on the proposal.

However, that regulation won’t go into effect until the end of the year.

Market News Published Daily

Market News Today - Citadel Draws Fresh Scrutiny from SEC in New Risky Bets.
Market News Today – Citadel Draws Fresh Scrutiny from SEC in New Risky Bets.

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Macquarie Analyst Expects to See Big Growth In AMC

Market News Daily - Macquarie Analyst Expects to See Big Growth In AMC.
Market News Daily – Macquarie Analyst Expects to See Big Growth In AMC.

Macquarie Analyst Chad Beynon expects to see big growth in AMC Entertainment (NYSE:AMC).

“We expect AMC’s business to grow with the market and benefit from strong flow-through given significant fixed costs in the business,” the analyst predicted.

The movie-theater chain beat Wall Street expectations for its Q1 results.

“Our results for the first quarter of 2023 represent AMC’s strongest first quarter in four full years.

We kicked off 2023 by continuing on our positive glide path to recovery, with more than a 21% growth in total revenues and a $69 million improvement in Adjusted EBITDA compared to the previous year.

The first quarter of 2023 and fourth quarter of 2022 mark the first two consecutive quarters of EBITDA since March of 2020.

This progress is a testament to the ongoing recovery in the industrywide box office, as well as AMC’s enduring commitment to the excellence and innovation as our guests enjoy a superb movie-going experience at our theatres,” said AMC CEO Adam Aron.

The analysts with Macquarie Research anticipate that domestic industry box-office revenue will reach $8.7 billion in 2023.

If that happens, it will represent a 19% year-over-year improvement. 

“Road to recovery getting better with box-office strength,” said Macquarie Research analyst Chad Beynon.

“Overall, AMC is highly optimistic about film volumes recovering to pre-pandemic levels over the next few years, supported by growing theatrical aspirations from the likes of Amazon and Apple,” he continued.

The analyst firm also pointed to concession spending at AMC, with first-quarter food and beverage spending per person hitting an all-time high of $7.99, a 50% increase over 2019.

Is the Short Thesis for AMC Entertainment Finally Changing?

Market News Daily - Macquarie Analyst Expects to See Big Growth In AMC.
Market News Daily – Macquarie Analyst Expects to See Big Growth In AMC.

We’re beginning to see that more and more analysts are acknowledging AMC’s pathway to recovery and even recognizing the movie theatre chain’s long-term potential.

“Q1 results ride industry tide higher,” wrote Wedbush analyst Alicia Reese, in a note.

“Theatrical exhibition is on the path to normalization, with an improving release slate in 2023.”

“AMC Theatres across the globe welcomed nearly 48 million guests in the first quarter thanks to the continued strength of James Cameron’s AVATAR: The Way of Water, and the knockout power of first quarter releases like Marvel’s Ant-Man and The Wasp: Quantomania, Creed III, Scream VI, Shazam! Fury of The Gods and John Wick Chapter 4.

All told, the first quarter North American box office easily surpassed 2022 by some 29%, totaling more than $1.7 billion.

The recovery in the European box office was even stronger in getting to pre-pandemic norms than that in the U.S.

As I have said for years, when our studio partners showcase their magical storytelling, there is robust demand to be realized at AMC theatres both in the U.S. and abroad.

We believe the first quarter of 2023 is just the tip of the iceberg for what’s to come in the remainder of the year,” said AMC CEO Adam Aron in a statement.

Revenue for the quarter was $954.4 million, compared with analysts’ expectation of $948.5 million, according to Refinitiv IBES data.

Other Big AMC Stock News

AMC FTDs have reached new high records this year in both number of fails-to-deliver and dollar amount.

For the month of April, AMC FTDs soared between 17 million and 18 million, reaching new high records this year.

The dollar figure topped at $85.4 million on April 10th, though none of these number figures are cumulative.

Latest AMC stock news.
Latest AMC stock news.

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.

Data shows that more than 50% of AMC Entertainment’s (NYSE:AMC) volume is now consistently trading in dark pools.

Gary Gensler announced exclusively on Bloomberg that 90-95% of retail orders don’t go through the lit exchange.

The SEC Chairman says these orders are rerouted to dark pools rather than the NYSE.

Payment for order flow (PFOF) is also partly the reason why orders aren’t processed in the lit exchange.

For more AMC Entertainment stock news and updates, join the newsletter below where more than 10,000 readers have opted to receive email notifications daily.

Market News Published Daily

Market News Today - Macquarie Analyst Expects to See Big Growth In AMC.
Market News Today – Macquarie Analyst Expects to See Big Growth In AMC.

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New Data Points Towards Possibility of a BBIG Short Squeeze

Market News Daily - New Data Points Towards Possibility of a BBIG Short Squeeze.
Market News Daily – New Data Points Towards Possibility of a BBIG Short Squeeze.

New data has surfaced pointing towards the possibility of a BBIG short squeeze; Fintel is giving Vinco Ventures a 92% chance of squeezing.

Disclaimer: this is not a ‘buy’ recommendation but rather an informative piece of news-related content highlighting the latest data reported by third parties related to Vinco Ventures (NASDAQ:BBIG) stock.

BBIG’s short interest has been rising, currently nearing 19% (updated daily here).

AMC’s short interest was only at 22% when it began to squeeze short sellers from their positions in 2021.

Shares rose from $9 and $14 per share to the company’s all-time high of $72 per share.

During this climb, AMC’s short interest came down to 14% before ultimately rising to its current levels today.

Fintel is also giving BBIG stock a short squeeze score of 92 of 100, per IP.

“The Short Squeeze Score is the result of a sophisticated, multi-factor quantitative model that identifies companies that have the highest risk of experiencing a short squeeze.

The scoring model uses a combination of short interest, float, short borrow fee rates, and other metrics.

Numbers range from 0 to 100, with higher numbers indicating a higher risk of a short squeeze relative to its peers, and 50 being the average,” says Fintel.

However, a BBIG short squeeze would also require massive momentum, as seen with AMC and GameStop in the past.

The company certainly has the short interest to send shares up, but big buying pressure will be key if investors are to set off a chain reaction of short sellers closing.

Is a BBIG Short Squeeze Likely?

Market News Daily - New Data Points Towards Possibility of a BBIG Short Squeeze.
Market News Daily – New Data Points Towards Possibility of a BBIG Short Squeeze.

A BBIG short squeeze becomes more probable as more and more investors begin to purchase the stock.

At the time being, we’re seeing there is very low volume going into BBIG stock, especially after its recent 1-for-20 reverse stock split.

Investors will need to see big volume for BBIG stock to squeeze.

For example, when AMC hit its all-time high in June of 2021, daily trading volume was between 500 million and 1 billion; that’s a lot of liquidity.

The next big short squeeze stock will be the one that has the most investors dropping liquidity bombs into the play.

Vinco Ventures has a great community of investors; however, company executives seem to have tarnished confidence with most shareholders.

Investors raised more than $42K to fight the board in court in an attempt to stop the reverse stock split and dilution from occurring.

BBIG investors believe that the company is failing everyday shareholders and must be held accountable for the significant losses seen in the market.

Many of which allege fraud could be at play here.

The matter is serious, but liquidity is running dry in many retail communities as stocks like BBIG have fallen more than 75% this year-to-date.

Do BBIG shareholders deserve a short squeeze? Absolutely.

Is a short squeeze in BBIG stock likely? Time will certainly tell.

Market News Published Daily

Market News Today - New Data Points Towards Possibility of a BBIG Short Squeeze.
Market News Today – New Data Points Towards Possibility of a BBIG Short Squeeze.

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Hedge Fund Opposes AMC Proposals in New Letter to Court

Market News Daily - Hedge Fund Opposes AMC Proposals in New Letter to Court.
Market News Daily – Hedge Fund Opposes AMC Proposals in New Letter to Court.

A hedge fund is opposing already approved AMC Proposals in a new letter to court.

A group of AMC investors were quick to scrutinize the motion as well as other investors who weren’t particularly too fond of the AMC/APE conversion and reverse stock split.

Andrew Hahn of URSA Fund Management, LLC has filed a complaint against the approved conversion of AMC and APE.

Documents have been circulating online of the letter sent to Vice Chancellor Zurn; however, if you questioned the authenticity of the letter no one would blame you.

The letter to court was written rather unprofessionally, leading some investors to believe that the letter is not authentic.

The letter was e-filed on Monday, May 22nd by Co-Founder and Senior Portfolio Managers Andrew Hahn and Russell Douglas.

In the letter, the hedge fund managers question the authenticity of the proposal’s approval rate and oppose the implementation of the reverse split and conversion.

URSA Fund Management, LLC has a large put position against AMC Entertainment valued at approximately $57 million, per WhaleWisdom.

Both Fintel and WhaleWisdom report the hedge fund has more than 11 million shares in put positions with a small hedge in calls.

URSA Fund Management LLC AMC Short Position
Market News Daily – Hedge Fund Opposes AMC Proposals in New Letter to Court.

Shareholders who’ve stuck to their conviction in voting yes argue that the hedge fund’s disapproval must mean they are on the right path.

But as Mullen Automotive shareholders have experienced, these proposals only lead to bigger dilution and bigger shareholder losses, at least in the short term.

There’s no telling how the approved proposals will play in retail’s favor, though it means big cash for the company and one of its various lifelines from its investors.

AMC Lawsuit to Be Resolved in Late June

Market News - AMC Lawsuit Updates.
Market News – AMC Lawsuit Updates.

“Some misunderstand the 1-for-10 reverse stock split, approved by 87% of March 14 votes, saying we are “stealing 90%” of your shares. You forget that the share price rises 10-fold at that time. EXACTLY the same as trading ten $1 bills for one $10 bill. Either way, you have $10.”

Investors have questioned why the reverse stock split in the first place if ‘nothing’ truly changes, but AMC Entertainment needs the capital.

“In your comments, some fear that after a RS, short pressure could cause price to go back down. But you neglect that it is EVERY bit as easy to short a stock priced at $3.00 as it is on a stock priced at $30. A RS itself has NOTHING to do with any subsequent prices afterwards,” said the CEO on Twitter.

Today we’re seeing Mullen Automotive stock hit a new 52-week low after it went through a 1-for-25 reverse stock split, demonstrating a stock may indeed get shorted back down to pre-split levels.

AMC’s lawsuit is scheduled to be resolved sometime in late June.

A Delaware court is targeting June 29-30 for a hearing to consider the proposed settlement between AMC and plaintiffs regarding the conversion of APE equity into class A common shares, share issuance, and a 1-for-10 reverse stock split.

The approved proposals will allow AMC Entertainment to raise capital to pay down its debt and use cash towards other business ventures and ideas.

Vice Chancellor Morgan Zurn was set to consider the proposed settlement in early April that would allow AMC to move forward with its conversion plan.

However, it seems this case might be bigger than we thought.

“I think it’s going to be almost impossible to do this in less than 60 days, given the stockholder interest that we anticipate,” Zurn said.

The judge was open to “getting this wrapped up by the end of June,” suggesting June 29 or June 30 for a settlement hearing.

AMC stock is currently up nearly +28% this year-to-date.

Latest AMC Entertainment Stock News and Updates

AMC FTDs have reached new high records this year in both number of fails-to-deliver and dollar amount.

For the month of April, AMC FTDs soared between 17 million and 18 million, reaching new high records this year.

The dollar figure topped at $85.4 million on April 10th, though none of these number figures are cumulative.

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.

Failure-to-delivers can occur in options trading or when selling short naked, per Investopedia.

FTDs can also occur if there is a technical problem in the settlement process carried out by the respective parties (clearing houses).

In April, AMC CEO Adam Aron announced that the company had contacted both FINRA and the NYSE to look closely at the trading of their stock.

“Many of you, and we, are aware that AMC Entertainment has been on ‘The Threshold List‘ for 3+ weeks, indicating a number of FTDs.

Some of you may be pleased to learn that we have contacted both FINRA and the NYSE asking that they both look closely at the trading of our stock.”

However, the CEO has not updated shareholders on what the NYSE or FINRA said in regard to the skyrocketing volume of AMC FTDs or today’s new high record.

Market News Published Daily

Market News Today - Hedge Fund Opposes AMC Proposals in New Letter to Court.
Market News Today – Hedge Fund Opposes AMC Proposals in New Letter to Court.

For 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 site that keeps retail investors informed.

You can also follow Frank Nez on TwitterInstagramFacebook, or LinkedIn for daily posts.


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  • Gain access to EXCLUSIVE FrankNez articles you won’t find here.
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