Fails to deliver in shares of AMC Entertainment Holdings, Inc. jumped over 2700% in the latest data from the SEC.
After falling to a low level at the end of September, fails to deliver exploded in October. As of October 14th, the last day in the latest data set, they stood at nearly 80,000.
This amount of fails to deliver is 789 times Amazon’s, 849 times Microsoft’s, and significantly larger even than Apple’s. Why would the largest stocks in the market have far fewer shares failing to deliver than AMC, with a market cap of just $20 billion?
First, let’s recap what a fail to deliver is. A share in a company fails to deliver when a trade is made but never completed. The shares are never actually delivered to the buyer.
This can happen for benign reasons. But AMC has persistent, huge fails to deliver.
When that happens, it’s often a sign of illegal naked short selling. This involves selling short shares you never borrowed.
The shares can’t be delivered because they never existed in the first place. Meanwhile, the seller has a powerful tool to the push the price down.
If you don’t even have to bother borrowing shares, you can keep selling forever.
What you tend to see in AMC stock is the market makers whittling down the fails to deliver for a little while, only to see them quickly pop back up to enormous levels. Following the stock for some time now, I’ve seen this pattern over and over.
We’ve noticed, but when will the SEC?
More on markets:
Raw SEC data (the fails to deliver are the number right before the company name):
20210930|00165C104|AMC|2815|AMC ENTMT HLDGS INC CL A COM S|35.54
20211014|00165C104|AMC|78931|AMC ENTMT HLDGS INC CL A COM S|37.91
20211013|023135106|AMZN|100|AMAZON COM INC;COM USD0.01|3247.33
20211014|037833100|AAPL|58498|APPLE INC;COM NPV|140.91
20211014|594918104|MSFT|93|MICROSOFT CORP;COM USD0.000012|296.31
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