AMC Stock Gets a Boost as Jim Simons Goes Long
Renaissance Technologies is one of the largest hedge funds in the world, not to mention their track record has been very good in the past. The investing giant Jim Simons of Ren tech is betting big time that Amc stock is going to squeeze and move up in price very soon. Renaissance Technologies LLC reports 86.71% increase in ownership of AMC / AMC Entertainment Holdings Inc. This came as a surprise to many as Renaissance Technologies already held millions upon millions of dollars of Amc stock before this latest filing. Renaissance Technologies Llc has filed a 13F-HR form disclosing ownership of 4,681,833 shares of AMC Entertainment Holdings Inc (US:AMC) with total holdings valued at $127,346,000 USD as of 2021-12-31. Renaissance Technologies Llc had filed a previous 13F-HR on 2021-11-12 disclosing 2,507,533 shares of AMC Entertainment Holdings Inc at a value of $95,437,000 USD. This represents a change in shares of 86.71 percent and a change in value of 33.43 percent during the quarter.
Adam Aron the ceo of Amc recently tweeted about how Amc’s “pre-announced” earning are looking much better than many expected. Amc accounted “Positive EBITDA, more than $145 million.” Amc also have a $1.8 billion dollar war chest of cash on the side ready for more acquisitions ect. Adam aron and the amc team have been hard on offense for the last year acquiring theaters by the handful. Amc’s revenue year over year is also making investors optimistic. “AMC Theatres Has the Biggest Day of Ticket Sales for a Single Title Since Reopening and the Second Biggest of All Time With the Advance Ticket Sales of SPIDER-MAN™: NO WAY HOME on Monday, November 29” Apes are hoping that movie blockbusters are going to continue in 2022 with names like Batman coming to theaters very soon.
Lending shares
The number one topic or concern when it comes to hedge funds buying shares of amc stock has got to be that institutions are only buying massive amounts of shares of amc stock in order to lend them out to short sellers.
(Defined from investopedia.com)
When a trader wishes to take a short position, they borrow the shares from a broker without knowing where the shares come from or to whom they belong. The borrowed shares may be coming out of another trader’s margin account, out of the shares held in the broker’s inventory, or even from another brokerage firm. It is important to note that when the transaction has been placed, the broker is the party doing the lending, not the individual investor. So, any benefit received (along with any risk) belongs to the broker.
The broker does receive an amount of interest for lending out the shares and is also paid a commission for providing this service. In the event that the short seller is unable (due to a bankruptcy, for example) to return the shares they borrowed, the broker is responsible for returning the borrowed shares. Though this is not a huge risk to the broker due to margin requirements, the risk of loss is still there, and this is why the broker receives the interest on the loan.
Amc stock shareholders are going to have to determine whether or not hedge funds like renaissance technologies buying amc stock is a positive or negative catalyst for the fate of amc stock in the future.