Retail investors have been diamond-handing AMC stock for quite some time now. Massive props to those of you who have been holding since AMC’s gamma squeeze as of late January. You guys have seen it all by now. The gains, the short ladder attacks, the manipulation in the media and so on. So, why hasn’t AMC squeezed yet?
After all, we deserve an explanation. With so much DD out on YouTube some answers just aren’t being answered. Luckily, we do extensive research to provide you with value you won’t find anywhere else.
Here’s what we know.
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AMC Entertainment is after all one of the most heavily shorted companies in the market. So why hasn’t this stock shot up to the moon yet!?!
Shorts and hedge funds alike continue to lose money every day they hold. Shouldn’t they be covering by now?
More and more institutional buyers are bulking up on the stock, retail investors continue to hold and buy the dip, so what are we missing?
For one, let’s start with volume
AMC’s market volume hasn’t been as high as we need it to be if we’re to see a short squeeze. Although, we’re finally beginning to see volume surpass 300m. We’ve also seen it go as high as 700m.
The market is going to need big volume to come in so we can see this price action really move. Well, how much volume do we need for AMC to squeeze?
The highest volume we’ve seen so far (post gamma squeeze) was back in February where the volume reached over 400 million. The volume will need to be well over this amount.
Trey’s Trades has mentioned the perfect squeeze setup will require the volume to sit around 600 million plus. Some DD has shown a squeeze will most likely occur in the billion volume mark.
Low volume = consolidation
We’ve been seeing this with AMC until now. The stock has held up really well consolidating in the $40-$50. This level of support is indicating investors are mainly buying and holding their positions. Retail investors will need to continue to add to their positions and project bullish sentiment if they want to see the price action continue to move up.
Fortunately, we have. AMC Entertainment’s stock price is now $55! Well done community.
Is consolidation bad?
Not at all. Consolidation is just a sign a particular stock has found a level of support.
Driving the price action up could force short-sellers to close their positions; which leads to the second reason why AMC has not squeezed yet.
Shorts still need to cover their positions
Shorts haven’t covered their positions which means they’re holding just like retail investors are. The only difference is they’re paying an interest fee until they close their positions.
It costs nothing to hold AMC for the retail investor but it’s costing shorts and hedge funds money every single day.
Moral of the story? Hold until shorts can no longer afford to pay the interest.
The short borrow fee has been relatively low, until now
Now, unfortunately the short borrow fee for shorts has been relatively low the past several weeks. At least according to Fintel. This just means the fees aren’t hurting shorts too bad right now. However, it looks like this interest has moved up dramatically as of May 15th. It jumped above 90% but has since then gone back down.
For this reason, shorts are betting they can continue to drive the stock lower and stick to their plan of bankrupting AMC.
Yup, although bankruptcy is officially no longer on the table.. And all movie theaters are now open.. and AMC Entertainment is bringing in huge revenue from new movie titles..
Yeah, I don’t understand their logic either.
However, the short borrow fee is off the charts at the moment. If we continue to see this interest fee rise then we can also assume shorts will be closing their positions sooner than later.
It would be in shorts best interest to close their positions now while their fee is still low, and the stock price is at $55. Because as soon as the stock price goes back up and so does the borrow fee rate, they’ll wish they had closed sooner.
Wanda caused more shares to float into the market
So if you’re curious why AMC hasn’t squeezed yet just know that it’s a matter of giving it time. Time for things to play out more, and time for new investors to get on the community’s side.
With Wanda converting class B shares to class A shares, it essentially put more shares out into the market. This happened quite some time ago (early this year) but it’s worth mentioning because it goes back to volume. This was previous news though, Wanda no longer has a big position in AMC due to foreign policies.
Key: Retail investors need to squeeze shorts out of their position by driving the volume and borrow fee rate up.
Wanda Group had fueled red days
Wanda is a group based in China who has been AMC Entertainment’s biggest shareholder for quite some time.
Unfortunately, Wanda had taken profits every time AMC’s stock rose to $14. This was usually seen as a major selloff in the market. CEO and President of AMC, Adam Aron explained in a recent interview with Trey’s Trades the cause for this. China’s government has a policy that requires international investors in China to focus their investments domestically to fuel their economy.
According to Adam Aron, Wanda is still a great partner and doesn’t believe the sell has anything to do with Wanda’s sentiment or believe in the company.
As of today, retail investors now hold majority of the float and Wanda no longer is a large shareholder in AMC. This gives retail investors more control.
Stock market manipulation
Something incredible is unraveling here. Something very bad.
And although it’s bad, it’s time for change. This entire journey with AMC and GameStop has allowed very intelligent people to uncover data that was never meant to be uncovered.
It’s only a matter of time before this data and DD get into the hands of writers looking to document this historic event occurring before our eyes.
Hedge funds pay the price
Melvin Capital, a hedge fund who shorts both AMC and GameStop stock has reportedly suffered a 49% loss its first quarter.
The reason being is they have not closed their short positions. This hedge fund along with short-sellers are losing money every day due to the short borrow fee continuously increasing.
Short sellers are sitting on billions of dollar loses, via REUTERS.
Retail investors started digging into the manipulation as AMC’s share price continuously got ladder-attacked. Shorts use this strategy as a means to drive the price down as the stock moves up.
Redditors have discovered which platforms are owned or partners of Melvin Capital and Citadel. We’ve seen manipulation through bogus headlines trying to divert the public from buying a heavily shorted stock. MarketWatch, who is owned by Melvin Capital, took to eliminating AMC from their #1 place on the most shorted stock list in the market.
This only urged more people do further dig in. We’ve found the unethical use of naked shares, which are essentially ‘fairy stocks’. They don’t exist but are traded and shorted otherwise. These are also known as ‘I owe you’s’.
A house of cards, r/superstonks (Reddit post)
A Redditor just posted an insane amount of DD on Reddit. This long form post discuses the transition from paper filled orders to the use of computers going all the way back to the mid to late 80s.
The post reveals the beginning of issuing naked shares. We’re also learning that a lot of transaction are being held by the actual institutions that are shorting these stocks.
Robinhood routes more than half of it’s customers to Citadel. This information has now been disclosed via the Washington Post.
You can read the full Reddit post here.
Trey’s Trades does a quick breakdown on this DD as well. The video is embedded for your viewing pleasure.
With all this in mind, manipulation in the stock market has been able to keep AMC’s share price consolidating in the $50 range thus far.
You can read more on how hedge funds manipulate the stock market to better understand why we haven’t seen an AMC short squeeze yet. Because this DD is so relevant, it will also be included in that post for new readers to see.
Regardless of the manipulation going on surrounding AMC’s squeeze, I strongly believe retail investors should stay the course. The price has moved up significantly! Once AMC’s stock price hits $80 we’ll begin to see $100 easily and beyond.
When a community rises and people stick together, real change is inevitable. With so much information coming to light, it’s only a matter of time that the tables are turned and justice is served.
Additionally, retail investors are winning right now. Shorts and hedge funds are losing money every day. More malpractice is being discovered and publicly shared. A lot of the analysis circulating AMC is pointing to a nasty nasty squeeze. Continue to stay positive and share good news.
AMC news and squeeze facts
- AMC is on FOX Business ‘squeeze potential list’
- Movie theaters are now open everywhere
- Godzilla vs. Kong secured $9.6 million in tickets on its opening night
- AMC Entertainment has raised over 2.2 billion dollars in cash
Bankruptcy is officially off the table according to Adam Aron, and new titles are making their way to AMC movie theaters. I’m personally bullish on the stock and see lots of organic growth potential.
Growth is what’s going to inevitably squeeze shorts out of their position.
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