Major new data just came out today from the SEC. It shows fails to deliver in AMC Entertainment Holdings, Inc. up 1088% in the first half of August:
These fails to deliver sometimes happen for benign reasons. But when massive fails to deliver occur in a stock over a sustained period, it’s often a sign of naked short selling.
Naked short selling is the illegal practice of intentionally selling shares short (betting against them) without ever borrowing the shares as required. This is a powerful tool to distort markets. Since you never have to actually obtain any shares, you can sell as much as you want, pushing down the price.
The fails to deliver in AMC are truly enormous. And after falling significantly last month, they’re back with a vengeance. As of August 13, the last day in the series, AMC’s fails to deliver were 157 times larger than Apple’s. Apple is the largest stock in the market, at 113 times AMC’s market cap.
How could there be so much questionable activity in such a small stock? I strongly suspect illegal trading, likely on the part of hedge funds.
Maybe they’re trying to make back some of their losses.
More on AMC:
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