AMC Stock Brings More Signs Of Corruption To Light

I’ve been following AMC Entertainment Holdings Inc (NASDAQ: AMC) and the corruption in the stock for some time now. If you want to get more in depth in the story, search for AMC at the top right of this website when you’re done reading this article. 

Nonetheless, while I’ve covered various aspects of corruption in the past, one of my readers who would like to remain anonymous has brought some interesting information to my attention surrounding FTDs. 

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What Is An FTD And What Does It Have To Do With AMC Stock?

In the market, an FTD is a failure to deliver. These take place for a few reasons. One is that an investor couldn’t afford to buy and deliver the shares they were contractually obligated to and another common reason is that a naked short position was opened and there were never any shares to deliver in the first place. 

Believe it or not, FTDs are pretty common in the market with nearly every ticker having a few on the books. In fact, popular stocks like Amazon.com and Apple may have a few thousand FTDs at any given time. So, the fact that AMC has FTDs is no surprise. In fact, it’s normal. 

The surprising fact is the sheer scale of the FTDs we find when we look at the stock. 

As of June 30, 2021, there were a total of 4,207,210 FTDs on AMC stock. That’s a massive number. To put that into perspective, on the same day, there were only five FTDs in aggregate on Amazon stock and around 6,000 on GameStop. 

So why are there so many failures to deliver on AMC stock?

Unfortunately, this high number outlines the corruption we’ve seen for some time. While naked shorting, or shorting a stock without real shares to back up the short in the market, is illegal, there has been a strong argument that institutional investors have been taking part in this activity when it comes to AMC. 

I haven’t talked about naked shorting much because it’s very hard to prove, and if there’s no proof, I don’t like to bring it to you, my valued audience. 

Nonetheless, it seems as though the proof is in the pudding. 

Why else would there be more than four million FTDs on the stock if it weren’t for naked shorting?

Interestingly, the data on FTDs is reported by the United States Securities and Exchange Commission. The same body of government that’s charged with maintaining fair and equitable markets. Bringing us to another point. 

For some time, investors have been saying that the SEC has been turning a blind eye to the wrongdoing done by hedge funds. Again, this wasn’t being reported because proof was hard to come by, but why would the SEC not investigate this exorbitant number of FTDs?

I’m not going to go into too much detail on that topic, but I strongly suggest you do some research on the SEC’s involvement in the AMC corruption. 

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The Bottom Line

The bottom line here is that the corruption in AMC stock is clearly very real. However, this is an opportunity. Think about it this way, there are more than four million FTDs, showing that there’s plenty of demand. Moreover, hedgies have been heavily shorting the stock. 

At some point, shorts will need to cover their positions, and those due stock will want to get their hands on it. While black holes and FTDs have acted as a smokescreen, hiding the corruption, smoke eventually dissipates, and when it does, the heavy demand for AMC stock has the potential to send it screaming for the top!

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