AMC - The Rise of the Apes

For those of you who don't know, let's recap this quickly.

The pandemic happened,
Movie theaters tanked,
Hedge Funds sold naked shares short,
Online traders found out,
They bought loads of shares thinking it would squeeze like Game Stop,
It kind of did, but it didn't, 
Holders are still holding,
And may be even holding the bag
Because the market has been rigged against them 

But AMC Holders call themselves APES, and they aren't going anywhere. 


So that's the short of it (no pun intended) and if you aren't privy to what is going on, you probably read that and thought to yourself... 

"What in the blue hell did I just read?"

Wait! What is going on with AMC? and Why do the people who own its shares call themselves APES? and What the hell is short selling?

Those are damn good questions which have easy or complicated answers just depending on how deep you want to go. 

But without boring those who already know, basically, when a company is headed for bankruptcy you can sell promises to sell shares at a cheaper price than what it is currently trading.


Because when there is a promise to sell an asset at a cheaper rate than what it is currently trading, the promise itself becomes valuable and tradable. If the price of your asset is currently worth $10 dollars but I promise to sell the asset for $8 dollars, you can take that promise and sell it for a value of a $1.99 and still make a 1 cent profit.

If the price of the asset is extremely volatile, meaning it's moving quickly and erratically from more than $10 to less than $10 dollars, then the promise has potential to become highly valuable. 

If I own a promise that someone will sell me an asset for $8 and the current asset is currently worth $20 on the open market then I have a promise worth $12 at least.

The true value comes in the perception that the current worth of the asset will explode to $30, or $40 or $50 or $500,000 before the promise expires.

If someone ask you to live up to that promise to sell that asset at $8 and they don't actually own that asset or have the money to purchase that asset on the market for what it's worth then they have successfully sold short an asset and if they do that hundreds and thousands of times, then they, my friend, are in a real financial pickle especially if that asset is now worth 3 or 4 or 5 or 10 times the value of the promise on the open market.

And that is what has happened to AMC. And so how do you make a stock price explode? Buy it all up and wait for the demand to buy back those short positions come. 

The only problem is the buy back or the squeeze never squoze, well it hasn't squoze (yet.) 

Those holders who hold and keep buying are called the Apes, just like how Apes hoard bananas, except these Apes have diamond hands and are hoarding shares. 


Squeezing is simply that the demand to buy back comes due to the expiring promises to buy, creating a demand, the Apes not selling shorten the supply and the new investors wanting to get a ticket on this Space Ship to Pluto in the form of FOMO buying causes a MOASS, mother of all short squeezes.  

But there was no squeeze and the apes have been patiently and impatiently waiting since as far back as February 2021 and now with the Delta variant on the rise and AMC theaters closing again, the battle for the Squeeze to squeeze may go on until the Summer of 2022 like any good planet of the ape sequel. 

Nobody knows when the squeeze will happen, if ever.