Fails to deliver in shares of AMC Entertainment Holdings have hit over 2 million shares, according to a new SEC report released this week.
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Failed trades peaked at 2,161,808 shares on September 28th. Fails to deliver remained elevated through the end of September, the last day covered in the report.
AMC’s new preferred shares, trading under the symbol APE, also saw large numbers of failed trades. They peaked on the same day, at 466,507 shares.
I find it suspicious that fails to deliver in both shares would peak at the exact same time. My hunch is that hedge funds launch coordinated attacks on both share classes at once.
One powerful weapon in their arsenal is naked short selling. This involves selling short shares you never borrowed.
Naked shorting is a powerful way to push down a stock’s price. If you never have to find shares to borrow or pay interest, you can short as many as you want!
Naked short sales often leave a trail of failed trades. You can’t settle a trade when the shares never existed.
Naked short selling is illegal in most circumstances. But why let that trouble you?
Another key piece of evidence is how out of line AMC’s fails to deliver are compared to much larger stocks. Here’s a snapshot from September 28th:
Alphabet (Google): 92
Amazon: 21,012
Apple: 11,083
Microsoft: 60,869
AMC: 2,161,808
APE: 466,507
These tech giants are hundreds of times the size of AMC. So why does AMC have dramatically more trades failing to clear?
Perhaps the tech giants are too big for hedge funds to attack.
Our markets rely on the confidence of investors. But it’s hard to maintain that confidence when stocks see huge numbers of failed trades and no one investigates.
What do you think of the chaotic market in AMC shares? Leave a comment at the bottom and let me know!
More on markets:
New Report: Millions of Fails to Deliver in AMC and APE Shares
Tiger Global Down 52% — Losses Over $18 Billion
Hedge Fund Manager’s Arrest Shows How Market Manipulation Works
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