Fails to deliver in shares of AMC Entertainment Holdings Preferred Equity (APE) reached staggering levels in December. Failed trades hit over 7.1 million shares in the latest SEC report before falling to end the period.
AMC issued these preferred shares in August as a way to raise capital. Since then, they’ve fallen steadily, losing over 75% of their value.
Get the blog before anyone else…subscribe!
Failed trades in APE shares peaked on December 2nd at 7,134,531. AMC shares also showed elevated fails to deliver, at nearly 300,000 shares.
Huge numbers of failed trades in APE preceded a substantial drop in the stock price. The shares lost 23% of their value in the next week alone.
A persistent pattern of huge fails to deliver can be a sign of naked short selling. This illegal practice involves selling short shares you never borrowed.
Naked shorting is a powerful way to crush a stock. If you don’t have to find any shares to borrow or pay interest, you can short as many as you like!
We’ve also seen persistent, massive fails to deliver in AMC’s common shares. Like APE, that has been coupled with a major fall in price.
So what’s going on?
My bet is that hedge funds are breaking the law and naked shorting AMC and APE shares. Why else would these huge numbers of failed trades persist for so long?
To get a sense of how out of line these fails to deliver are with other stocks, let’s do a comparison. Here are the fails to deliver on December 2nd for some of the largest stocks in the market:
Amazon: 40,406
Apple: 319
Berkshire Hathaway (Class B shares): 36
Google: 151,519
Microsoft: 9,233
These stocks are hundreds of times the size of AMC. And yet, AMC sees more failed trades than all of them.
Combined.
The SEC must investigate the chaos in AMC and APE shares. It’s the only way we can have a fair, efficient market for everyone.
What do you think of the failed trades in AMC and APE? Leave a comment at the bottom and let me know.
There will be no blog on Monday for New Year’s. Thanks for a great 2022 and see you on Tuesday!
More on markets:
Is SBF Laundering Money As We Speak?
New Report: AMC Fails to Deliver Hit 4.3 Million
Tiger Global Losing $185 Million a Day
Get the blog before anyone else…subscribe!
If you found this post interesting, please share it on Twitter/Reddit/etc. This helps more people find the blog!
Save Money on Stuff I Use:
This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.
More on Fundrise in this post.
If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!
Misfits Market
I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!
I wrote a detailed review of Misfits here.
Use this link to sign up and you’ll save $15 on your first order.
Photo: AMC CEO Adam Aron
Tremendous 
Leave a comment