Since January 2021, when retail investors spurred on by Reddit’s Wall Street Bets community started buying up Gamestop and AMC shares, there has been an absolute rampage of FUD over AMC, the entertainment company which has been heavily shorted by hedge funds for many months.
For months, the retail investors (or Apes, as the community has adopted as its moniker) have been buying and holding the stock, ignoring risk warnings and analyst estimates, and refusing to sell for any reason. Community members who sell at profit are often labelled as “paper handed” with investors, many of them completely new to the stock market, proud of their diamond handed approach.
Huge Communities of Apes
The community has grown so large that previously unknown YouTubers have attained massive followings in just a few short months as more and more people pile in.
Some of them have become so successful, they are being invited onto mainstream media to talk about the phenomenon, and even hosting live chats with the company CEO Adam Aron, who has used the surge in interest to recapitalise the company which was decimated by the year-long Covid-19 pandemic.
And every day, more and more news stories from the likes of CNET and Motley Fool running almost constant hit-pieces telling everyone what a stupid buy AMC really is. And yet, this week, AMC hit new all time highs, smashing it’s way to $74 on a day when the price of the stock ripped well over 100% at one point.
And even despite huge a 30% retracement occuring the following day, it appears that the Apes are still holding together with no sign of panic selling. In fact, if anything, the huge volatile price action has done nothing but encourage them even more, with many adding to their positions at prices which just a week ago would have been 4 or 5 times higher than the market price.
So, despite constant FUD over AMC being pushed by the financial (and often mainstream media) it appears that the Apes were just not buying it, especially considering that the short interest in the company hasn’t actually gone down, it’s increased. Yes, you heard that right. Short sellers are doubling down and have been incurring huge losses, with hedge funds estimated being stung for around $5 Billion in the last week alone.
Apes don’t care about FUD over AMC
It’s clear. The Apes aren’t paying any attention to the FUD over AMC, and this coincides at a time in history when many are questioning the cosy relationship between big tech, Wall Street financiers, government and the mainstream media. In fact, it’s probably fair to say that public trust in the traditional ‘news’ outlets has never been more lacking, as ordinary people rail against the mainstream media.
Big Tech censorship, exposes of media giants by groups like Project Veritas, and the latest scandals proving collusion and cover-ups of corruption by elected officials and their ilk isn’t helping their cause either. Apes are more likely to trust YouTubers including the gentle and playful calm of Matt Kohrs and Andrew Mo, as well as the super fast-talking Trey Collins .
These guys often spend all day talking to their now huge audiences, and are refusing to behave like traditional finance journalists. Props such as duckshirts, chairs, lamps and a particularly cute dog called Meatball, have become unlikely celebrities in this new world of Ape investors.
And these YouTubers are clear in their message: Hold the line… The hedgies are in bed with the mainstream media, and they are just trying to scare you with FUD and half-truths into selling because they are utterly screwed, especially as the price just keeps trending upwards.
They may indeed have a point. When you consider the fact that institutional money has massively shorted the stock, and a ton of evidence that appears to point to a gargantuan number of synthetic shares circulating in the market.
With naked shorting being touted as the biggest reason for the now 99% squeeze potential of AMC, according to Fintel, who also note the short interest borrow fee to be at a whopping 18% (but it’s been much higher too) and so few shares available to borrow that the daily number rarely goes above 1 Million.
With literally MILLIONS of apes all around the world, all singing the same mantra of “Apes Together Stronger” it really could be game over for the short sellers, with the likes of Citadel firmly in the firing line of the community. And as more and more media panic sets in, accusing them of everything from utter stupidity to manipulating the market (which is frankly hilarious when one considers the institutional establishment’s history of market manipulation and illegal practises over decades) it’s only emboldening the Apes, with many setting price targets ranging from $100 to $100,000 per share.
At the end of the day, shorts have to cover…and if margin calls start to happen, it could easily trigger what the Apes refer to as MOASS….The Mother of all Short Squeezes. How this plays out will go down in economic history, although it is likely to lead to a raft of new legislation when the dust settles, but until then the FUD over AMC is probably far from over, but it’s likely to make absolutely no difference whatsoever to the Apes.