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SEC publishes meme stock video
If you haven’t watched the SEC meme stock video, it’s embedded below.
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.
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:
Off exchange trading
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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Retail investors often wonder how high AMC’s short squeeze price potential could be.
We heard many numbers get thrown out there earlier this year.
They ranged from $1,000 to $10,000 and even $100,000 and $500,000 per share.
What exactly are we dealing with here?
And, could AMC’s short squeeze price even be higher?
Welcome to Franknez.com – the blog that fights for retail investors. Today we’re going over AMC’s short squeeze price potential.
Let’s get started!
Measuring AMC’s Market Cap For Squeeze Potential
AMC’s current market cap is approximately $21.86b with a share price of $42.60 (11.16).
When Volkswagen’s short squeeze price reached 1005 euros, the market cap was worth $296b euros, or $370b dollars, via Reuters.
Let’s calculate AMC’s share price at a $370b dollar market cap just for comparison.
$370b market cap ÷ 513.145 million outstanding shares = $721.04 per share.
AMC’s market cap would have to be almost 17x more than it’s current market cap.
Now, keep in mind synthetics/naked shares aren’t being calculated and I’ll get more into this later.
Is this market cap possible? Absolutely.
Here are a few companies with similar market caps:
Procter & Gamble $356.192b
Johnson & Johnson $428.245b
AMC’s market cap was worth $300m (Nov. 2020) -$500m (Jan. 14, 2021) earlier this year, via CompaniesMarketCap.
That’s a 72x market cap growth in a year; making a 17x market cap surge up to $721.04 per share rather feasible.
Community, a move up to the high hundreds seems fundamental to me.
Especially considering big shorts have not covered.
There’s not much data that ties AMC’s current share price to short covering.
We’ve seen AMC’s short interest come down 3.7% to its current 16.27% from a peak of 20% in the span of 5 months.
We’ve also seen AMC’s share price trade between the low $30s to low $40s.
One could argue that this small drop in short interest could be due to very small short covering, thus bringing the share price back up to $40 from the $30 level.
We’ve been trading sideways for quite some time now.
What’s to say the $30 level isn’t being used to cover small positions, driving the share price back up to $40; and rinse and repeat?
If that’s the play, hypothetically speaking, then the ones benefiting from apes holding are day traders and some shorts.
Buy VS Sell Ratio
If this is the case, we’ll need to start seeing more buying pressure and less selling.
Otherwise, retail investors could be creating an escape route for short sellers and a playground for day traders.
This $40 range is reminding me of the $14 level Wanda Group wouldn’t let us get passed by.
Every time we would hit $14, the company would sell shares.
Only this time it seems it’s a combination of day traders selling high, short sellers shorting the stock, and some retail selling (non-apes).
This MOASS play is not for everyone.
But if more investors dedicated this play to squeezing shorts from their positions, then retail could certainly 17x AMC’s market cap up to the $700 per share price range just from momentum alone.
Short Squeeze Price With Synthetics Covered
There are many reasons to believe millions upon millions of synthetic shares have been used to short AMC stock.
But we don’t have the support from anyone to confirm this to the point where it can be calculated.
Here we can come up with numbers based on estimations but I’m not here to do that for you.
Do I believe synthetics have been used to drive AMC’s share price down?
Do I believe hedge funds will do the ‘right thing’ by covering these?
Off exchange markets allow hedge funds to swap stock back and forth behind the lit market.
Who’s going to regulate and ensure hedge funds cover these shares?
So until that happens, you can count a short squeeze price calculation with synthetics out for now.
But it’s for this exact reason why retail must fight for a fair market and for proper regulation.
Covering billions of synthetics could absolutely push AMC’s share price into the high thousands to even tens of thousands.
The problem here is we have no proper or legal documentation that allows us to accurately identify this scenario.
A proper MOASS would require proper regulation, forcing hedge funds to close all borrowed and naked shares.
How Do We Get A Proper Synthetic Share Count?
By requesting it from regulators.
I saw a poll on Twitter tagging Adam Aron whether management should look into answering shareholder’s question regarding synthetics in the market.
Adam Aron has turned the cheek in the past saying they have no knowledge of these synthetics.
However, we should be tagging regulators, not the CEO of AMC.
I just personally don’t think he can get involved.
But if he could, as a shareholder himself, it would greatly play in our favor.
Only time will tell how this unfolds.
Setting Realistic Expectations
So, we don’t have an exact count of synthetics.
What we do know is that AMC’s short squeeze price potential can be massive when looking at just how many synthetic shares could be out there.
But we also know this.
If AMC’s market cap grew by 72x from November 2020 to November 2021, then it can certainly grow another 17x (VW short squeeze market cap example); where the share price will trade above $700 per share.
This could be caused by heavy buying pressure from retail, whales, some short covering, and FOMO buyers.
Now you have to ask yourselves, how large will my portfolio be worth at $700 per share?
Just for perspective of course.
Do you have enough shares to be happy with the results?
Or will you continue to hold 5 shares waiting for this to hit +$100,000?
Bulls make money, bears make money, pigs get slaughtered.
There’s no telling how high or low AMC’s short interest will be around $700 per share.
If it’s still relatively high then it would simply mean there’s more room for growth.
However, if there’s a significant drop then it’s a sign plenty of shorts covered.
MOASS Will Require A Synthetic Share Count
If AMC is to experience a proper MOASS, it’s imperative that regulators undergo a synthetic share count investigation.
I’m going to publish an article regarding this matter that we can pitch to regulators and get circulating out there.
Keep in mind I’m only using Volkswagen’s short squeeze market cap as an example to paint a possible scenario for AMC based on a 17x market cap from its current market cap.
These type of plays are rare and there’s not much information about them.
This means we’re paving the way.
I hope that this article provides you with a perspective that helps you identify just how high AMC’s share price can go in general.
Should we push regulators to investigate?
Should we sit on our hands and just wait on regulators?
Identify how many shares you’d need to meet your goal, not counting synthetics for now, and ensure you can walk away with a significant amount of money when you’re ready to.
This play is continuously unfolding.
I would love nothing more than to create another article time from now calculating a confirmed synthetic share count for the community.
I hope you found this article helpful in one way or another.
Again, I’m using information I have at hand.
I could calculate several scenarios with different market caps but the reality is there could be enough synthetics to take AMC to Pluto and into the several thousands to tens of thousands of dollars per share.
Whether culprits take accountability for these synthetics or not will be up to us to fight for.
With that being said, I’m going to be using my platform to voice tackling this synthetic share count problem.
We cannot let hedge funds get away with this so easily.
I’d love to hear your thoughts. Leave them in the comment section of the article below.
The same way we can pull each other up, we can also pull one another down.
Short Interest Data
To the best of my knowledge, there are two major factors that will allow us to identify when shorts cover.
The first is through the short interest data.
What does short interest data tell us?
The short interest helps us understand how much of a stock’s float is being shorted.
It’s the number of shares that have been sold short but have not yet been covered or closed out.
For example, a heavily shorted such as AMC has a short interest of 16.56% (currently).
Apple on the other hand has an SI of 0.62%.
Apple has almost no shorts to squeeze from their positions where AMC has 16.56% of the float shorting the stock.
That’s approximately 106.82 million shares out on loan that have yet to be covered.
So in theory, as shorts begin to cover their positions, AMC’s short interest data should begin to decrease.
Price Action Change
Another common way to identify whether shorts cover their positions is through sudden price movements.
Short covering adds momentum to the buying pressure of a stock which results in a spike or bullish run.
What makes identifying when shorts cover is that the price action and short interest data don’t align at the same exact moment.
The reported short interest doesn’t happen right away.
It’s actually released a week and a half.
However, when we look at AMC’s runup back in June, we see that AMC peaked two days after it’s last report high short interest.
It took two business days for AMC’s small short covering to take AMC from $31.81 to an all-time high of $72.62 per share.
The chart from Ortex below shows us a drop in short interest between the dates of May 28th and June 9th where the stock began to cool down from it’s runup.
We saw the short interest drop from 20% to 14.76% by mid July before shorts began taking new positions, further driving the short interest up past 19%.
And I know what some of you might be thinking. Shorts haven’t covered! They never did!
Community, I’m presenting you with data that shows how price fluctuated based on the short interest updates.
Strangely enough, when the short seller, not hedge fund, Iceberg Research announced they closed their short position in AMC, two days later we saw a very small increase in price action though retail volume was low.
People were quick to dismiss Iceberg simply because it’s one analyst publicly shorting AMC but I though the news was super bullish.
In fact, I hoped other short sellers would follow in closing too.
Will AMC Squeeze Based On The Current SI?
AMC’s current short interest as of the date of this publication is 16.39%.
AMC’s current short interest by definition is considered to be extremely high.
There is more than enough juice to get some serious price action out of AMC with this data.
And of course, if more shorts begin taking positions in AMC then the short interest percentage will continue to go up.
Otherwise, we can expect it to stay the same if they continue to hold, or decrease even if very small short positions are indeed being closed.
With AMC’s short interest slowly going down and an incredible amount of short shares being borrowed, I’m curious whether their exit strategy is to heavily short the stock while closing smaller short positions.
You can see how many short shares are being borrowed daily via. StonkOTracker.
Tinfoil hat on but I can see a strategy where the amount of overleveraged shorting is countering any small short covering.
Even then, this scenario is just speculation to be quite frank.
If you have any idea why the short interest is slowly going down I’d love to hear your thoughts in the comment section below.