AMC Theater, Times Square

AMC Fails to Deliver Are a Massive Outlier

Fails to deliver in shares of AMC Entertainment Holdings, Inc. passed 400,000 in data just released by the SEC yesterday. But what does that actually mean?

To put the number in perspective, I pulled the fails to deliver for the 10 largest US companies by market capitalization. As you can see, at the end of the reporting period (December 14), AMC’s fails to deliver dwarf them all.

Combined.

Am I the only one who finds this a little odd? Why would this comparatively tiny company, at a $13 billion market cap, have more shares failing to clear than companies valued in the trillions?

If this high level of fails to deliver were unprecedented, I’d think nothing of it. But massive numbers of AMC shares failing to clear has been common for many months (see this, this and this).

Sometimes fails to deliver have a benign explanation, like clerical errors. But why would there be a colossal number of mistakes in AMC shares and not in Apple?

And why would that be repeated for much of 2021?

I suspect a more nefarious explanation: naked short selling. In this usually illegal trade, a trader sells short shares he does not own.

The shares are never delivered because they never existed. Meanwhile, the trader can push down the share price without limitation.

When will the SEC act on its own data?

There will be no blog tomorrow. I have an acting gig in the city! See you Thursday!

More on markets:

AMC Fails to Deliver Soar Past 400,000

How Elrond Could Take Over Payments Worldwide

AMC Blows Up Hedge Fund with Sordid Past

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