Y’all Apes have it all wrong…
FIRST THE PRICE OF AMC CAN NOT AND WILL NOT GO TO 100,000 dollars a share anytime during your lifetime. Barring Third World inflation and deadly pandemics anyway.
Now that we got that out of the way, I have to make this crystal clear. If someone really expects a movie theatre chain, no matter how altruistic, no matter how well managed, no matter how much free popcorn, is expected to literally change the course of human events with a market capitalization of twice that of the United States annual Gross Domestic Product, then they need to take the time for some peaceful introspection.
But some of y’all Apes are apparently thinking like actual Apes. (That’s not a good thing).
The idea of squeezing the shorts is hardly anything new. It has been done since standing under the buttonwood tree in New York.
None of you Apes read history. In all the posts I have seen on Reddit and Twitter I have yet to see one that has examined what happened to the short-sellers in the Dole Foods, buyout in 2013 for 1.2 billion dollars (insert pinky).
David H. Murdock, Dole’s controlling shareholder and chief executive took the company private in a cut and paste buyout deal they did in 2003.
The investing public, quick to expect a higher price bid the stock up to a price greater than the tender offer of $13.50 plus $2.74 in cash. Other investors sold the stock short ending in a situation where there were 49,164,415 shares in the float with 36,793,758 shares outstanding. Hey #APES, is any of this sounding remotely familiar?
So naturally, there were some aggrieved #Apeancestors ending in a class-action shareholder lawsuit claiming 2.74 cents for each of their 12,370,657 shares. Because of the 3-day net settlement, the Depository Trust Corporation had no way of tracking these short sellers so it was left to the individual #APE to collect. Any dreams of squeezing the shorts into oblivion were dashed.
In the case of AMC stock today there is no buyout. There is no tender offer on the table. There is no entity including the company that has any interest in taking AMC Entertainment private. And certainly not at a share price of hundreds of dollars. Forget about a thousand. What do you expect IMF and the Fed to step in for the free popcorn?
So what happens?
In the AMC Entertainment #MOASS case, we have here and present the short sellers will continue to roll option contracts until someone or something actually would tender for the company at which point they would simply do exactly the same thing they did in 2013 in the Dole Foods case. There is a shareholder class-action lawsuit seeking to claim something that never existed in the first place putting the onus of collection on the shareholder.
How is this fixed?
The idea of equal market access is justified. And it must be equal access to not only the larger players but to all participants.
Real-time Dark Pool trade reporting to the consolidated tape would be a very good start. And that is a relatively easy fix for an increasing flaw in market transparency.
Pay for order flow should be examined and made more transparent to all market participants.
Fixing these issues addresses the increasingly skewed distribution of the risk capital markets.
But to really FIX IT, the market needs to go to a continuous net settlement system. Ahh, the stuff of back-office dreams in the ’90s. It CAN be done. It’s only a matter of the infrastructure. The technology exists in the form of blockchain.
But until the market authorities and players make that leap, the #APES will be hodling their AMC stock for one another for a very very long time.
(and piss on ya Bloomberg Businessweek for your digital access billing).
