Apes are going to hold and hold and hold driving up the price further and further to make the hedge funds bleed as much as possible until they are inevitably forced to buy back their millions of shares. They will need to buy our shares, and we set the price. Since the late January short squeeze, AMC’s ape army has had two separate instances where they genuinely could have saved AMC. Both times, they chose to tie CEO Adam Aron’s hands and favor their own misguided agenda over helping out the company they swore to protect. One of the main practices the ape army is most upset about it naked shorting.
He’s gotten rich, quickly, turning $8,000 in savings last December into roughly $1 million today through trading AMC stock and options. They kept buying and buying, and holding and holding, and once the real shares were all bought up, the hedge funds started making synthetic shares and selling those shares into the market trying to drive the price down. When the price dropped, instead of selling like the hedge funds wanted them to, apes said “thank you for the discount” and kept buying more and holding. Nobody has sold for the past 5 months since the movement really got started in January, and people are adding more everyday. We are, as one member of what is known as the “ape army” explained to me, in the midst of a digital version of Occupy Wall Street. They are instead trying to use their balance sheets to fight back.
The proxy vote was to allow for the issuance of up to 500 million shares. To be clear, this didn’t mean AMC was going to issue 500 million shares, or that the issuance would have occurred all at once. It was merely designed to give Aron and the board the flexibility to issue stock to raise capital, should it be needed. As of the date of writing, the Federal Reserve had more than $7.9 trillion in assets on its balance sheet.
The markets and penny stock action were slower this week … It’s the week leading up to the biggest summer holiday of… There is $195 application fee; however, Inc. reserves the right to decline applicants for subjective reasons at any-time. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. Leidos Holdings is the largest government information technology company. It has also actively expanded into hardware, providing the electronics and brains for autonomous ships and building a strong portfolio of classified research capabilities geared for the intelligence and space community. I know a lot of you have questions, and I thought it would be helpful to provide you with some overall context to understand the significance of the movement you just joined.
How many APE buys?
It’s also been added to the Russell 2000 Index and will be the top-weighted stock when the index rebalances on June 25. At their size, AMC and its fellow meme stock GameStop GME can now move the index either up or down dramatically in any given day. This is for informational purposes only as StocksToTrade is not registered as a securities broker-dealeror an investment adviser.
Their interference in the market has disrupted risk, making assets not only more expensive for the average investor to add to their portfolio, but the value of the dollar they are investing with worthless. No one can predict at this point how this will all play out, but investors would be wise to be very careful in trying to tame this gorilla. It’s a strange time to be an investor, but over time fundamentals will come back into play and the markets will revert to rational behavior. In the meantime, investors would be wise to be cautious when trying to benefit from meme mania.
As we’ve said numerous times in this space, the worst positioned companies are those with negative cash flows and near-term debt maturities. For instance, GTT, another recent favorite of the Reddit crowd, is a telecommunications company that’s facing bankruptcy. It still trades on the NYSE despite not having issued public financials for over a year.
The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty https://forexbitcoin.info/ on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk. But Collins noted that the theater chain has survived the COVID shutdowns, despite earlier bankruptcy rumors.
In time, as the gimmicks fail to deliver, all while top execs unload shares, something has to give. Collins also predicted that the stock would get a boost from “social and cultural sentiment” toward movie theaters in general. Sean Williams has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Insiders get to trade in dark pools which mask the free flow of information.
If the U.S. government were to deemphasize research to fund active operations, the conflict in Europe or elsewhere could actually be a negative to defense stocks. However, given the importance of research, that seems unlikely to happen. Defense companies initially traded up when the war started, but they have given up those gains in the months since.
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You “short” a company when you think the value of the stock is going to go down. When the country locked down and AMC closed their doors and their revenue literally went to $0 overnight, it was a no brainer play for the hedge funds. Covid hit last March and a couple of big hedge funds concocted a plan to drive AMC into bankruptcy by “shorting” it and make a ton of money in the process. Reese’s price target is in line with other analyst projections. Per The Wall Street Journal, the median price target on AMC stock is $5 per share, while the high price target is just $16 per share. Compared to the current share price, these targets are much more reflective of AMC’s underlying value, where heavy shareholder dilution has outweighed the benefits stemming from the company cleaning up its balance sheet.
And if the cheapest price someone is willing to sell for is 1,000, or 10,000 or 100,000, well then that’s what the hedge funds have to buy it for. So they started borrowing millions and millions of shares from brokers and sold them “short” at the market price at the time, and they pocketed the cash from the sale. The idea is that the stock price will drop, you can buy them back later at a lower price, and then return the borrowed shares to the broker and keep the difference. If the company goes bankrupt, the stock goes to $0 and they don’t have to buy anything back at all and keep everything. Pretty much the only consistent message you’ll find on Reddit, Twitter, Yahoo! These folks are so concerned with the idea that new shares being issued could disrupt their squeeze that they continue to deny AMC’s CEO his wish for improved financial flexibility.
At this point, apes have demonstrated on message boards and via YouTube that they’re willing to support a misinformation campaign if it’ll help their agenda. For example, they continue to put forward the incorrect assertion that hedge fund short-selling bankrupts companies, all while ignoring the tangible reasons an underlying business might be struggling. By misinforming others about the culpability of institutional short-selling, apes are trying to lure new investors to what’s effectively become a pump-and-dump scheme.
Instead, shares sold off as much as 17% this week following the announcement. But after popping today, AMC stock investment real estate: finance and asset management by fred prassas is trading just below $40. 84% of retail investor accounts lose money when trading CFDs with this provider.
AMC’s “Apes” Care About Their Agenda, Not the Company
It seems that participants in these online forums are posting notes with suggestions like “let’s drive up today” and then it happens. These groups seem to be acting in concert to manipulate the market by forcing short sellers to cover their resulting losses. It’s just as sinister as the old penny stock “pump and dump” schemes where boiler room operators would cold call to bump up a stock price and then quickly cash out leaving suckers holding the bag. The underlying principle is the same, it’s just a lot easier to do now. Certainly, none of this frenetic activity has anything to do with fundamentals.
- Leidos Holdings is the largest government information technology company.
- Companies in the defense sector offer a wide range of products and services to their main customer, and some are better investments than others.
- If the U.S. government were to deemphasize research to fund active operations, the conflict in Europe or elsewhere could actually be a negative to defense stocks.
- Not so with meme stocks, the latest monkey wrench thrown into the grooved gears of Wall Street.
We will continue to find a way to stay independent, but come together for fairness, free choice and opportunity. I listened to AMC’s first quarter investor call where Adam Aron, the CEO, talked about how investor relations weren’t a big deal in the past. Now, he said he has 3.2 million retail shareholders who own 80% of AMC so he’s taken to Twitter to communicate with them.
So, somebody is going to lose their investment and it will likely be shareholders. They literally have hundreds of millions of shares to buy back, and we own them all. They have to buy them back eventually, and every day that the borrowed short shares are still on loan, the hedge funds are paying interest to the brokers they borrowed them from.
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The company’s defense business has also branched out into autonomous submarines and other products. Lockheed Martin is the world’s largest defense company and the U.S. government’s biggest contractor. It’s the lead contractor on the F-35 Joint Strike Fighter, the world’s most expensive airplane. I’m sure a few crypto aficionados will try it out once or twice. But it’s doubtful this will do much to counter the secular decline movie theaters are experiencing.
AMC followed this up by seeking shareholder approval to sell another $25 million in shares in 2022. AMC’s apes had the opportunity to finally do something good for the company twice, and both times they chose to vote down measures to raise capital. By pushing back against the 500-million-share proposal — AMC eventually pulled this proxy vote — apes denied the company the opportunity raise capital to put itself on better financial footing. For one, the pandemic ravaged its operations, and it’s still burning through quite a lot of cash.
Now because of all of the synthetic shares the hedge funds have created to keep shorting these stocks, apes likely own more way more shares than are actually supposed to exist. But real or synthetic, each share the hedge funds sold short is a liability on their books that must be bought back in order to close out their position. Getty ImagesThese are strange times to be an investor.
Collins is indicative of the investing set behind the extreme price movement upending the shares of GameStop, AMC and other companies like Wendy’s and BlackBerry–seemingly irrespective of their corporate fundamentals. (To use these investors’ slang, these are meme stocks or, put with crude humor, “stonks.”) Collins has no formal finance education and is not some professional investor stationed behind a Bloomberg terminal. He maintains a day job while living on the web as much as possible.
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