AMC stock has been steadily stumbling and retail investors holding the stock are wondering why in the world Adam Aron is selling his AMC shares.
If you’ve been following the market news for quite some time now, you’ll know that Adam Aron advised about this many months ago.
In fact, he mentioned it twice this year.
Retail investors shouldn’t worry however, and I’m going to explain why.
Welcome to Franknez.com – today we’re discussing why Adam Aron is selling off AMC stock since there seems to be some concerns regarding this.
Let’s get started!
Adam Aron Sells Shares to Diversify Portfolio
According to Adam Aron, selling AMC shares has been a long-term plan he’s had to diversify his portfolio for estate planning.
The CEO had been transparent with his shareholders earlier this year regarding cashing profits in increments later this year.
He claims that at 67, it would be wise to diversify his portfolio.
Which makes sense given he has not sold one single share of AMC stock in the 6 years he’s run the movie theatre chain.
In this SEC filing you can see Adam sold 625,000 shares at $40.52 per share.
Not every ape in the community is on board with the CEOs decision, and I get that 100%.
However, it’s important to remember that retail investors own majority of the float, even if the stock is temporarily on sale.
AMC CEO Hedges Against Tax Bracket
Another reason Adam Aron sold a chunk of his AMC shares was to avoid a heavy tax bracket.
By selling AMC stock, the CEO was able to pivot and strategize against extremely high taxes.
Adam Aron has a unique standpoint.
One I personally think the community should not directly compare themselves to.
Adam Aron is expected to receive more shares as company incentives going into the new year.
It’s not yet clear whether he plans on selling more AMC stock in 2022.
However, he has expressed that he still holds well over 2 million AMC shares and believes in AMC.
The media seems to be trying to portray Adam Aron rather negatively for selling his shares, something he anticipated in the Q3 earnings call.
Should Retail Investors Be Worried?
While there’s some sentiment of FUD arising from this news, I don’t think retail investors should worry when it boils down to a short squeeze play.
AMC’s current share price is an opportunity for shorts to cover and for retail investors to add to their positions.
AMC’s short interest is close to 19%.
This short interest percentage is extremely high according to Kiplinger.
Overall, the strategy to buy and hold to squeeze shorts from their short positions does not change.
Adam Aron’s move to sell AMC shares is equivalent to a whale cashing in profits on the way up.
Yes, it affects AMC’s current share price, but as long as retail investors don’t dump their stock, a short squeeze play is very well alive.
What Are Your Thoughts on Adam Aron Selling His AMC Shares?
I’d love to know your thoughts in the comment section below.
Do you feel like Adam selling his shares was anti-ape or do you support his right to do so?
Do his actions influence your thoughts on the community, short squeeze play, or position in AMC?
Let the community know below.
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He only sold roughly 20% of his stocks. He still holds 80%. He definitely believes in AMC💎
Newbie since May. I’ve been buying as much as I can in the dip. Will hold until the MOASS. As our friend, Frank Nez, commented; it’s inevitable.
Hold since february i m wating MOASS