AMC stock continues to have an incredible amount of demand for the stock, so why is AMC stock going down?
After all, the ape community has made it almost one whole year without selling the stock.
Shouldn’t big short sellers be closing their positions by now?
The answer is simpler than you think.
Welcome to Franknez.com – today we’re diving into 3 BIG reasons why AMC stock is going down. Here’s what you need to know.
Let’s get started!
Now, I published this same exact topic discussion on my YouTube channel so if you’re subscribed then you might have already watched it.
Either way, I will embed it at the end of the article for your viewing pleasure as it will enhance this article.
Why is AMC stock dropping?
AMC stock has been dropping for a few months now.
Its steady downtrend has retail investors wondering what in the world is going on, and whether the stock will pick up again.
High rewards come with high risks, and it would be wise to remember to never overleverage your investments.
If you’ve bitten off more than you can chew, you’ll be happy to hear AMC’s share price decline is only temporary.
I said this earlier in our topic discussion on the channel; just like bull markets don’t last forever, neither do bear markets.
Eventually we’ll see a correction.
Let’s start with the first reason why AMC stock has gone down.
#1. Omicron & Covid news
AMC stock is down due to various publishers pushing fears about Omicron and Covid news.
Now, AMC is not the only stock affected by this, the entire market has been hit because of the grim news.
Growing cases in the United States of the variant could cause businesses to have setbacks again.
Due to the uncertainty of how the variant will affect the economy, stocks are taking a massive toll from fear of the unknown.
AMC stock is down to a variety of reasons, but this economic fear is everywhere and is affecting the entire market, including the century old movie theatre chain.
#2. Adam Aron selling has driven AMC stock down
Adam Aron, CEO and President of AMC Entertainment sold hundreds of thousands of shares, cashing in millions of dollars for his estate planning.
The admired CEO had notified shareholders of the company mid last year on his plans of doing so towards the end of the year.
Dumping hundreds of thousands of shares proved to move AMC’s stock price down as the ape community held.
While most of the community is indifferent about his decision, his actions moved AMC’s share price down significantly, especially due to a negative media.
Coverage by mainstream media only fueled this fire as more short sellers have begun to enter the play.
AMC’s short interest has risen from 16% to almost 20%!
When you combine the Covid news with bad press about the CEO taking profits, AMC’s share price is sure to take a hit as we have seen.
However, these two reasons why AMC stock is going down aren’t as big as this third one.
And I know many of you know where this is going.
#3. AMC stock continues to be heavily shorted
Mainstream media might have painted a little picture about how AMC experienced a short squeeze last year but that’s far from the truth.
After all, these shill platforms are all tied together by News Corp., a company Citadel Securities’ Ken Griffin is invested in.
AMC stock continues to be heavily shorted even in 2022.
Hedge funds have been using market manipulation strategies to suppress the stock from squeezing them from their short positions.
These financial institutions lost billions from shorting AMC stock in hopes the company would go bankrupt in 2021.
Since then, hedge funds like Mudrick, Archegos, and Anchorage Capital, who betted against AMC Entertainment, have closed.
Big hedge funds such as Citadel Securities have not closed their short positions in AMC causing turmoil for their customers.
The multi-billion-dollar hedge fund has even received a lifeline of $1.2 billion from partners Sequoia and Paradigm, their first private funding ever.
Even as hedge funds overleverage themselves to drive AMC stock down, it’s only a matter of time before more begin to throw in the towel.
Here’s what to expect in the coming weeks
AMC stock and the market in general will eventually start to see a correction.
Remember, bull markets don’t last forever.
However, keep in mind that AMC stock may still drop lower in price due to various market abnormalities (i.e., Omicron news, global market risks like Evergrande, market manipulation).
Related: How do hedge funds manipulate the stock market?
One thing is certain.
AMC’s short interest is more than high enough to squeeze shorts from their positions.
When AMC’s SI dropped from 20% to 14%, we saw the company’s share price surge from $14 to $72.
The short interest is nearing 20% again with other brokers showing much higher.
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