The fee rate to short AMC stock on Webull is now 56.99%.
The broker has labeled the movie theatre stock as ‘hard to borrow’.
AMC’s short selling fee rate is quite high compared to much larger cap companies.
For example: Tesla (TSLA), Apple (AAPL), and Amazon (AMZN) all have a short selling fee rate of only 9.49%.
GameStop (GME) shares are also labeled as ‘hard to borrow’ but with a short selling fee rate of only 23.74%, 33.25% less than AMC Entertainment (AMC).
Webull also currently has a 150% maintenance requirement for AMC short sellers.
This means 150% of the value of the short sale is required as the initial margin.
If the value of the position falls below maintenance margin requirements, the short seller will face a margin call and be asked to close the position or increase funds into the margin account.
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AMC’s share price continues to slide even as the company simultaneously produces results for Wall Street to take a look at.
CEO Adam Aron has been vocal about Wall Street doom prophets and ‘naysayers’ on social media, taking a chance to address them every time the company takes a step forward.
AMC shares rose 4.54% on Wednesday to $5.30 after experiencing a week-low of $4.74 on Monday.
But the AMC community remains resilient.
Despite mainstream media and corporate fear, retail investors aren’t giving up yet.
Shareholders anticipate probabilities of squeezing short sellers again will rise during the next bull market.
When that will be, no one knows.
Though Bank of America’s CEO says he predicts a recession will hit the U.S. economy during the first quarter of 2023 and ease by the third quarter.
If true, the markets might not pick up until the end of 2023 or start of 2024.
For the retail community it’s no longer a question whether if AMC Entertainment will squeeze or not, but rather when.
Recreating a Big Event
Short sellers are already facing high fees to short the movie theatre chain stock, and regulators are already under fire for allowing dark and off-exchanges to suppress securities in the market.
So, what will recreate big price movements like we witnessed last year?
In my personal opinion, the best time retail investors will want to play offense is when the markets begin to favor long positions.
It’s during bull markets that we see company stock perform extremely well.
Like the events that occurred in January and June of 2021, playing offense during a bull market tends to trigger intense price action.
However, AMC’s short selling fee and maintenance requirements are currently high.
This means retail and institutional investors still have an upper hand, as well as the potential to recreate these events much sooner.
They’ll just need a lot of capital, especially from institutions, to see this come to fruition.
But I’m curious to hear your thoughts on this.
Leave a comment down below.
About The Author
“But the AMC community remains resilient “. Not by choice, Because most of us are Bag Holders because at this point we are down so Big we can’t do anything else but hold.
Bull Market ?? I am not hearing good things about 2023, Morgan Stanley is predicting the S& P to hit 3300 and as low as 3000. I am hoping the Market start to turn bullish in 3rd quarter.
Let’s start a discussion! Leave your thoughts below.