We’ve seen the total shares sold short steadily increase for AMC over the last few months. As of April 15th 2022 there was a reported 99,750,000 shares sold short and since then the total shares sold short have reached 109,830,000 as of May 31st 2022. The increase in AMC shares sold short tell us that investors are continually short selling the stock and are betting that it will go down in the future. This could mean trouble for investors if the AMC stock short squeezes and forces short sellers to cover their short interest positions and buy back the stock at a price higher than what was anticipated. Especially since AMC box office sales have taken off this summer and AMC has reported beating 2019 data points with ticket revenue. With AMC not skipping a beat during this bearish market, retail investors anticipate the stock price could surge on its own.
We know institutional investors like Gabe Plotkin with Melvin Capital, have seen trouble with short positions in the past — specifically with the risky short position they had with GME. Last year Plotkin was caught in the middle of the GME short squeeze frenzy, which resulted the company in unrecoverable losses and having to close down completely. After billions in losses, Plotkin wrote in a letter, “The appropriate next step is to wind down the Funds by fully liquidating the Funds’ assets and accounts and returning all cash to investors.”
WHICH INSTITUTIONS HAVE SHORTED AMC STOCK?
There’s a long list of institutions that have shorted AMC stock, among some of those investors are Bank of America Corp DE, Group one, Citadel, Subsquehanna, Wolverine Trading, Piction Mahoney, 683 Capital, Walleye Tracing LLC, Jane Street Group LLC, Sandler Capital Management, Shay Capital LLC, PEAK6 Investments LLC, JPMorgan Chase & Co, Goldman SAches Group Inc, HBK Investments, Focused Wealth management Inc, EMG holdings L.P., and more.
Specifically Bank of America has been in the spotlight, with many retail investors closing their bank accounts with Bank of America after finding out that Bank of America was heavily shorting the AMC stock. Currently Bank of America is 1,007,500 shares short. However, institutions more heavily shorting the stock include Susquehanna, who is 11,004,100 shares short, Citadel who is at 4,889,900 shares short, Goldman Sachs with 2,785,000 shares short.
While institutional investors might have an upper hand with the buying power up front, AMC retail investors are in this for the long haul. They’re willing to buy and hold positions for however long it takes. Ultimately institutions are having to pay while the short positions are open and the longer they have them opened, the more they’ll have to pay — and if the highly anticipated short squeeze happens these institutions may be in more financial distress than what they ever bargained for with these short positions.
STOCKS THAT ARE THE MOST HEAVILY SHORTED?
AMC of course is not the only stock that institutions are shorting — which is important to remember when we’re considering the amount of risk that these investors are exposed to. The fact that institutions may have a number of risky short positions open may mean there’s a higher likelihood that they’ll have to close positions to avoid too much loss and risk. Most recent reports show that companies with even larger amounts of short positions opened on them include Charter Communications (4.12 billion), Palo Alto Networks, Inc (3.85 billion), Lucid Group LLC (2.66 billion), Coinbase Global Inc, (2.14 billion) and Gamestop Corp (1.94 billion).