Tag Archives: Stock Market

New Data: AMC Fails to Deliver Down 85%

New data from the SEC today shows fails to deliver in stock of AMC Entertainment Holdings, Inc. dropped 85% in the second half of August:

AMC fails to deliver from 8/13 (last day of prior reporting period) to 8/31 (last day of current reporting period), from SEC data

Investors have closely watched fails to deliver in this popular stock. Its large and persistent fails to deliver, or trades that don’t close, may be a sign of naked short selling.

Let’s review what short selling is and how naked short selling fits in. Short selling is borrowing a stock to sell, then giving it back to the owner later.

A short seller is betting the stock’s price will drop. That means he’ll make money because the shares he has to return aren’t as valuable as those he sold.

Naked short selling is selling short shares without borrowing them first. It’s generally illegal.

Naked short selling can powerfully push down the price of a stock. If you never have to find shares to borrow, you can sell as many as you want!

A long term pattern of huge fails to deliver, which we see in AMC stock, often happens because of naked short selling. Trades don’t close because the shares never existed in the first place.

Hedge funds have been short selling AMC shares all year, and have taken some brutal losses along the way.

I suspect they are using illegal naked short sales to drive down the price and save themselves.

I suspect hedge funds are using illegal naked short sales to drive down the price and save themselves. $AMC #AMC
https://tremendous.blog

Just because fails to deliver dropped at the end of August doesn’t mean the problem is gone. As you can see from the chart above, when they become extremely elevated the market makers tend to clear them up, only to see them rise again.

AMC still has a huge amount of fails to deliver compared to other stocks. With 140,978 shares failing to deliver on August 31st, AMC has 28 times the fails to deliver of Apple.

Apple is the biggest stock in the market, at over 100 times AMC’s size.

The SEC and market makers have a long way to go to make the market in AMC shares work properly.

What will it take to get their attention?

More on AMC:

AMC on the Threshold List: Strong Evidence of Naked Short Selling

AMC in Top 4% of Stocks for Fails to Deliver

For Retail Traders, AMC Has Become the Only Meme Stock

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Save Money on Stuff I Use:

Amazon Business American Express Card

You already shop on Amazon. Why not save $100?

If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.

Best of all: No fee!

Fundrise

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.

iHerb

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%! 

Misfits Market

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. 

Should Anyone Own Bonds?

I used to love bonds. Especially government bonds. Guaranteed income, easy liquidity, and stability in a crisis.

What’s not to like?

But my old flame hasn’t done much for me lately. And I’m not the only one.

The Problem

Bonds have hovered at or below the rate of inflation since 2009:

Just barely keeping up with inflation might be enough, given that I have much riskier positions in stocks, real estate, and tech startups.

But if an investment pays a yield below the rate of inflation, you’re essentially paying someone to hold onto your money. Instead of getting even a modest return, you lose a little of your cash every year, like clockwork.

Today, I own long term treasury bonds and medium term treasury and mortgage bonds. The long term bonds pay 1.73%, and come with a big risk of decline when interest rates increase. Which they’re just about bound to do, given that that they’re are sitting near 0.

The shorter duration bonds pay even less: 1.28%.

What Kind of Return Do We Need to Keep Up With Inflation?

Recent inflation numbers have been scary: over 5% a year. But, if we look at the longer run averages, the picture brightens a little.

Over the last 20 years, inflation has averaged 2.16%. Over the last 10 years, the figure is 1.89%.

I don’t know how long the sudden higher inflation of the last couple of months will last. But it appears that a floor for a return that will keep up for inflation is no less than 2%.

Where Can We Get Our 2%?

The attractive features of government bonds are liquidity, stability, and a modest income. Let’s review a few alternatives, with that in mind:

1) Corporate bonds. Returns aren’t much better than government bonds, at around 1.7%.

2) Fundrise. Love it, but not a good substitute for bonds. Real estate development just isn’t as stable. It’s not very liquid either. However, returns are good. I’ve notched around 7% since I started investing.

3) Single Premium Immediate Annuities. A rather exotic choice. Rates can be good at around 3.5% in some cases. And the income is guaranteed. But they’re not very liquid: there’s a 10% IRS penalty for withdrawal before age 59.5. But if you’re older, they could work well.

4) Dividend Aristocrats. These aren’t just any high dividend stocks. These have a history of paying higher dividends every year for at least 25 years. That’s a surer bet than many stocks with even higher dividends, because those huge payouts may not last.

The yield on some of these large, stable companies is impressive:

ExxonMobil: 6.5%

Chevron: 5.5%

IBM: 4.8%

Consolidated Edison: 4.2%

Of course, the stock prices could go down.

But if you’re buying for income, and the company is large and stable and has increased its dividend of decades on end, you don’t care. You just collect your check and head to the golf course.

What’s more, you can buy a basket of these stocks, rather than just one, insulating yourself from the chance that one of them cuts its dividend.

Wrap Up

Dividend Aristocrats seem like one of the best options to replace the income bonds no longer offer. They are also less likely to fall with higher interest rates.

What do you think the best option is? Leave a comment at the very bottom of the page and let me know! I just might use your idea. 🙂

More on investing:

What Does the Pandemic Mean for Real Estate Investments?

Why I Just Invested in EyeRate, the Best Online Review Tool

What I Learned From an Investor Who Turned $100,000 into $100,000,000

Photo: “Governor Jerome Powell speaks at Brookings panel, ‘Are there structural issues in U.S. bond markets?'” by BrookingsInst is licensed under CC BY-NC-ND 2.0

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Save Money on Stuff I Use:

Amazon Business American Express Card

You already shop on Amazon. Why not save $100?

If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.

Best of all: No fee!

Fundrise

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.

iHerb

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%! 

Misfits Market

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. 

Why is the SEC Threatening Coinbase?

The SEC has threatened to sue Coinbase Global, Inc. over its plans to introduce a crypto lending product called Coinbase Lend :

The U.S. Securities and Exchange Commission has told Coinbase Global Inc (COIN.O) that it plans to sue the cryptocurrency exchange if it goes ahead with plans to launch a programme allowing users to earn interest by lending digital assets, Coinbase said.

Coinbase was working with the SEC prior to the surprise lawsuit threat, per CEO Brian Armstrong:

Why is the SEC Doing This?

It’s not every day that the SEC privately threatens a lawsuit against a major American corporation. What is the SEC’s motivation here? From Cointelegraph:

The Commission could have a reason for not being forthcoming with information related to cryptocurrency lending products and this stance could be related to upcoming enforcement actions against the interests of BlockFi.

If the SEC is preparing to go after BlockFi and other players in the crypto lending scene then perhaps responding to Coinbase’s request for guidance might have constituted revealing its enforcement playbook prematurely.

Behind the Crypto Lending Boom

Behind the rush into crypto lending: incredibly low interest rates. Whether you look at bank deposits or treasury bonds, returns on safe assets are well below the rate of inflation.

Coinbase planned to offer 4% interest in its Lend product.

Is the SEC Right?

It seems likely to me that Armstrong is wrong in saying his Coinbase Lend program isn’t a security, and thus need not comply with typical securities laws. Banks have an exception from these laws when they pay interest on an account.

But Coinbase is not a bank. So it’s hard to see how this product isn’t a security.

SEC Shenanigans

That said, I think the SEC’s behavior here is extreme and bad for American business. If the SEC has determined that Lend is illegal, they should tell Coinbase that. At least Coinbase could move on to other projects.

Instead, they’ve left Coinbase in regulatory limbo. They don’t know if their product is legal or not, they don’t know what the SEC’s standard is, and they can’t launch anything without being sued.

This is a recipe for stagnation, not innovation. How can American businesses compete in the global economy when regulators won’t work with them?

As part of its threats to Coinbase, the SEC is even digging into private citizens:

Apart from the threat of legal action, a move seemingly out of left field from the Commission’s usual approach to enforcement, the SEC also asked Coinbase to provide customer details from its Lend waitlist.

On what authority are they doing this? And what are they planning to do to those prospective customers?

Keeping investors safe has its place, but bringing business to a standstill and snooping on average Americans isn’t part of it.

The SEC needs to clean up its act.

More on tech:

How Solana Could Wipe Out Visa and MasterCard

What if Everyone on Earth Had Super Fast Internet for $1?

China’s Real Goal in Tech Crackdown: A Regimented, Obedient Society

Photo: “775208327GB00106_TechCrunch” by TechCrunchis licensed under CC BY 2.0

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Save Money on Stuff I Use:

Amazon Business American Express Card

You already shop on Amazon. Why not save $100?

If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.

Best of all: No fee!

Fundrise

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.

iHerb

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%! 

Misfits Market

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. 

What a Hedge Fund King Fears Most


Stephen Mandel, Jr., founder of hedge fund Lone Pine Capital, ranks #752 on Forbes’ list of billionaires.

His net worth: $3.9 billion. His fund’s performance is among the greatest in history.

So you might be surprised to hear what he fears most:


In late January, when retail traders swarmed into short targets of hedge funds like Melvin Capital and D1 Capital, commentators and industry experts called the moves unprecedented, but Mandel sees the parallels between the dot-com bubble excitement and today’s Reddit-directed investors.


“The day I feared the most, every year, was the day after Thanksgiving because it was the day when a lot of people were at home, echoes of what’s going on now — retail traders sitting at their desks,” he said.


He said that the firm’s ethos on long positions — investing in change, whether technological, regulatory, or otherwise — is the same, but shorting has become so expensive thanks to the additional competition in the markets that it’s impossible to make the same alpha in that part of the portfolio.


“There was no problem borrowing Pets.com and eToys and Onsale and all these crazy things. Today, when things like that appear in the markets, the borrow cost shoots up to ridiculous levels immediately, the access to borrow is very limited,” he said about the shares funds that bet against a stock have to borrow from shareholders to hold a short position.


He has a reason to be afraid. Other hedge funds like D1 Capital and Melvin Capital lost 20-50% of their fund trying to fight retail holders of stocks like AMC Entertainment Holdings, Inc. and GameStop Corp.

The cost to borrow and sell short shares of AMC and GameStop is not particularly high at the moment. However, in any new rally, that interest rate could easily shoot up, as GameStop’s did in January. This would make holding or adding to short positions very costly for hedge funds.

And all the while, they’d be losing money as the stock moves against them.

I find it fascinating that the most threatening thing for a billionaire hedge fund manager is a guy sitting on his couch.

Thing is though, there are a lot of them.


More on AMC and hedge funds:

AMC in Top 4% of Stocks for Fails to Deliver

AMC Fails to Deliver Up 1088% in Latest Data

Hedge Funds Get Special Treatment During Margin Calls

Photo: “I’m scared too, but we’ll make it.” by qousqous is licensed under CC BY-NC-SA 2.0

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Save Money on Stuff I Use:

Amazon Business American Express Card

You already shop on Amazon. Why not save $100?

If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.

Best of all: No fee!

Fundrise

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.

iHerb

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%! 

Misfits Market

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. 

AMC Fails to Deliver Up 1088% in Latest Data

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:

AMC #3 on Robinhood for September, Behind Only Apple & Tesla

For Retail Traders, AMC Has Become the Only Meme Stock

Short Sellers Lost $1 Billion Yesterday in AMC and GameStop

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! 

Save Money on Stuff I Use:

Amazon Business American Express Card

You already shop on Amazon. Why not save $100?

If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.

Best of all: No fee!

Fundrise

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.

iHerb

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%! 

Misfits Market

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. 

AMC #3 on Robinhood for September, Behind Only Apple & Tesla

The seasons are changing but one thing is not: the incredible popularity of AMC Entertainment Holdings, Inc. among retail investors.

Robinhood lists AMC at #3 on its leaderboard for September, behind only Apple and Tesla:

Apple is the largest stock in the entire market, with a market cap of $2.6 trillion. That’s 113 times larger than AMC. Tesla is 32 times larger.

AMC is more popular than massive companies like Amazon, Microsoft, or Walt Disney. It’s also significantly hotter than Robinhood Markets itself, at #12.

Even more incredible is that AMC has held the #3 position for six months straight. AMC also holds the #3 spot on Fidelity.

My understanding is that the Robinhood leaderboard reflects how many users own a particular stock, not the total amount held. So the amount of money in Apple, Tesla, or Amazon held by Robinhood accounts could be much greater than the amount in AMC, given those companies’ massive size.

Nonetheless, when a $23 billion business is more widely held than some of the most powerful companies on earth, I stand up and take notice.

More on AMC:

Charting The Huge Drop in AMC Fails to Deliver

For Retail Traders, AMC Has Become the Only Meme Stock

Short Sellers Lost $1 Billion Yesterday in AMC and GameStop

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! 

Photo: “Robin Hood sai à noite” by freddie boy is licensed under CC BY-SA 2.0

Save Money on Stuff I Use:

Amazon Business American Express Card

You already shop on Amazon. Why not save $100?

If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.

Best of all: No fee!

Fundrise

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.

iHerb

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%! 

Misfits Market

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. 

For Retail Traders, AMC Has Become the Only Meme Stock

As meme stocks rocketed upward this week, one stock captured virtually all retail buyers. Retail traders funneling money into meme stocks put 93% of it into shares of AMC Entertainment Holdings, Inc.:

Stocks preferred by day traders soared 10% Tuesday, the most since early June as trading volumes accelerated. Long-short hedge funds that are quick to dump bearish bets were likely among drivers for Tuesday’s strength in stocks that have high levels of short interest, Vanda said in a report.

“Despite the broad rally in meme stocks, retail purchases were mainly concentrated on AMC, with over $56 million in Tuesday’s session,” Vanda’s Ben Onatibia and Giacomo Pierantoni wrote in a note. “All other meme stocks combined, totaled a paltry $4 million in net retail buying.” 

AMC Entertainment Holdings Inc. surged 20% Tuesday to the highest since July 9. 

For more than 90% of retail money in a category to go to a single stock, even for a brief period, is nothing short of extraordinary.

Hedge funds have begun to join the Reddit crowd, piling into heavily shorted meme stocks. They’re also carefully monitoring social media sites for the next hot play:

…a Goldman Sachs basket of the most-shorted U.S. shares has surged like never before to outperform the broader market by 31 percentage points this year. Retail buying of names most-shorted by hedge funds in 2021 like AMC Entertainment Holdings Inc. and GameStop is upending the once-popular quant trade.

In a survey with 100 hedge-fund managers overseeing US$231 billion conducted by SIGTech, nearly three-quarters said they’ve increased use of data from social media and chat rooms over the past year.

I’d be willing to bet some are doing a lot more than monitoring. They’re probably posting content of their own. And with the massive budgets of hedge funds, they can hire armies of coders to make their message omnipresent. 

An interesting new era is dawning in the hottest stocks in the market. The financial establishment is co-opting the hordes of small traders trying to take them down. 

Buckets of institutional money could move meme stocks like never before.

More on AMC and hedge funds:

SHORT SELLERS LOST $1 BILLION YESTERDAY IN AMC AND GAMESTOP

CHARTING THE HUGE DROP IN AMC FAILS TO DELIVER

HEDGE FUNDS HIT HARD BY MEME STOCK LOSSES, BADLY BEHIND S&P 500

Photo: “We’re #1” by 6S is licensed under CC BY-NC 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! 

Save Money on Stuff I Use:

Amazon Business American Express Card

You already shop on Amazon. Why not save $100?

If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.

Best of all: No fee!

Fundrise

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.

iHerb

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%! 

Misfits Market

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. 

Short Sellers Lost $1 Billion Yesterday in AMC and GameStop

Short sellers have been fighting retail traders all year. Yesterday, they took a major hit:

“Heavily shorted stocks have, for the last month, been less volatile than earlier this year. Today we saw an end to this,” said Ortex co-founder Peter Hillerberg.

The share price gains in AMC and GameStop generated losses for close to $1 billion for short sellers, Hillerberg said.

AMC Entertainment Holdings, Inc. was the most active stock in the entire options market. This is remarkable for a company whose market cap is only $23 billion. Apple, the biggest stock in the market, is over 100 times as large.

The options activity in both AMC and GameStop Corp. was strongly bullish, with call options (the right to purchase shares in the future) going like hotcakes.

No obvious news propelled these stocks upward. Yet hedge funds maintain their risky short positions.

This means using investors’ money to bet against stocks that gyrate wildly at the whims of retail traders. I find that to be irresponsible.

But, to quote one of my favorite movies:

Well, it could’ve been worse, right? Could’ve been my money.

Marv, Wall Street

More on AMC and meme stocks:

CHARTING THE HUGE DROP IN AMC FAILS TO DELIVER

HEDGE FUNDS HIT HARD BY MEME STOCK LOSSES, BADLY BEHIND S&P 500

HEDGE FUNDS GET SPECIAL TREATMENT DURING MARGIN CALLS

Photo: “Fitness” by Walimai.photo is licensed under CC BY-NC-ND 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! 

Save Money on Stuff I Use:

Amazon Business American Express Card

You already shop on Amazon. Why not save $100?

If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.

Best of all: No fee!

Fundrise

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.

iHerb

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%! 

Misfits Market

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. 

Charting The Huge Drop in AMC Fails to Deliver

There appears to be some fishy activity going on in shares of AMC Entertainment Holdings, Inc. The stock has long had huge “fails to deliver,” or trades that aren’t completed.

This can be a sign of illegal naked short selling, which is selling shares short without borrowing them first. Naked short selling is a sophisticated and powerful tactic that can drive share prices down, fast.

Last week, we talked about the huge drop in fails to deliver that occurred in the most recent SEC data, from the second half of July. Today, I decided to chart all AMC’s fails to deliver for July (above.)

As you can see, the number was staggering at the beginning of the month. As of July 1st, little AMC had fails to deliver 35,000 times as large as Amazon, one of the biggest companies on earth.

Exchanges whittled that number down substantially over the course of the month. (Note that the figure is cumulative, rather than just reflecting fails to deliver that occurred that day.)

Perhaps moves by the SEC, New York Stock Exchange (NYSE), National Securities Clearing Corporation (NSCC), and others to clean up the failed trades had an effect.

AMC still has massive fails to deliver for a stock its size. It ended the month with 160,233 fails to deliver, still 239 times the end-of-month figure for Amazon and 351 times Apple’s.

Regulators have made progress, but there’s a lot further to go.

More on AMC:

NEW DATA SHOWS BIG DROP IN AMC FAILS TO DELIVER

AMC HAS 35,000 TIMES THE FAILS-TO-DELIVER OF AMAZON

HEDGE FUNDS HIT HARD BY MEME STOCK LOSSES, BADLY BEHIND S&P 500

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Jim Simons Buys AMC, Bets on Retail Trend

James Simons of Renaissance Technologies LLC is one of the greatest hedge fund managers in history. His fund’s annualized returns are an eye-popping 66% a year since 1988. Lately, he’s been loading up on shares in meme stock AMC Entertainment Holdings, Inc:

Renaissance Technologies, which held approximately 516,000 AMC shares by March this year, has more than tripled its stake in the firm. Cumulatively, RenTech now owns more than 1.8 million shares.

Despite the entrance of some hedge funds, about 80% of AMC’s stock is held by retail investors.

Simons seems acutely aware that individual traders are flooding the stock market and AMC shares in particular. Indeed, the number of retail brokerage accounts has exploded this year. From The Economist:

In 2019 around 59m Americans had accounts with one of seven of the largest brokers. This number has surged since to 95m, as 17m new accounts were opened in 2020 and 20m were set up this year.

Short squeeze or no, that’s a powerful source of demand that Simons and Renaissance can benefit from.

I don’t know whether the stock will go up, down, or in circles. But I do know that I wouldn’t want to bet against Jim Simons.

More on AMC and hedge funds:

HEDGE FUNDS HIT HARD BY MEME STOCK LOSSES, BADLY BEHIND S&P 500

NEW DATA SHOWS BIG DROP IN AMC FAILS TO DELIVER

HOW SHORT SELLERS COULD EVADE THE NEW NSCC RULES

Photo: “Jim Simons” by Graham is licensed under CC BY-SA 2.0

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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.

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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%! 

Misfits Market

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.