There is a lot of talk lately on Twitter and Reddit about AMC’s withdrawal Tuesday of an obscure SEC form called an S-3. Form S-3 is a filing that registers securities. In this case, the securities were convertible bonds, or bonds that can convert into stock when the holder chooses.
Many on social media conclude that this withdrawal is somehow part of a plan by AMC to kneecap short sellers. I’m not quite clear on how that would work, but removing the possibility of a lot of new share issuance does keep a tighter market in the shares, making a short squeeze somewhat more likely.
But I think the key part of the S-3 withdrawal is this:
The Registrant confirms that no securities have been issued or sold under the Registration Statement.
It appears to me that AMC is simply withdrawing an SEC filing that no longer reflected reality, thus keeping their regulatory filings current. They didn’t issue shares under the agreement, so
the shares couldn’t have been sold short. In all, there doesn’t seem to be a clear connection between the withdrawal of the S-3 and short selling in AMC.
This excellent video explains the situation well:
I won’t pretend to be an expert on S-3’s. Is it possible I’m missing something? Absolutely, and I’m curious to hear your perspective in the comments at the bottom of the page.
That said, we don’t need to draw any conclusion from the S-3 withdrawal to have strong evidence of illegal activity by short sellers in AMC. As I covered yesterday, repeated fail-to-delivers in a heavily traded stock like this, along with serious short interest, powerfully suggest illegal naked short selling.
Whatever the S-3 means, there’s more than enough evidence of misconduct already.
More on AMC:
AMC ON THE THRESHOLD LIST: STRONG EVIDENCE OF NAKED SHORT SELLING
HEDGE FUNDS LOSE $12 BILLION ON AMC AND GAMESTOP
HEDGE FUNDS’ AMC DOOMSDAY SCENARIO
(Full disclosure: I don’t have and have never had any position in any AMC securities, long or short. I just find the phenomenon of a 28-fold increase in a stock in 6 months interesting as an investor.)
Photo: “Monopoly Guy Graffiti – Rich Uncle Pennybags” by Indrid__Cold is licensed under CC BY-SA 2.0
If you found this post interesting, please share it on Twitter/Reddit/etc. using the buttons at the bottom of the page. This helps more people find the blog! And please leave your comments at the bottom.
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 and returns have been good so far. More on Fundrise in this post.
If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account. I will also get a fee waiver for 90-365 days, depending on what type of account you open.
The only place I buy vitamins and supplements. I recently placed an order and received it in less than 48 hours with free shipping! I compared the prices and they were lower than Amazon. I also love how they test a lot of the vitamins so that you know you’re getting what the label says. This isn’t always the case with supplements.
Use this link to save 5%! I’ll also get 5% of however much you spend, at no cost to you.
My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.
Use this link to sign up and you’ll save $10 on your first order. I’ll also get $10.
Tremendous 