AMC's Cost to Borrow Skyrockets to 731.8% - Short Sellers Run for the Hills!

Attention all you stonk traders and Wall Street enthusiasts, hold onto your hats because things are getting wild! The latest news is that the cost to borrow AMC stock has skyrocketed to a whopping 731.8% on Wednesday, according to the Stonk-O-Tracker. That's right, folks, you read that correctly, you could practically buy a small island with that kind of money. So, what does it all mean? Let's dive in and find out.

The Rise of the Cost to Borrow

If you're not up to speed with the latest trends in the world of stonks, let me catch you up. AMC Entertainment, the movie theater chain that almost went bankrupt during the pandemic, has been on a bit of a rollercoaster ride lately. Despite all odds, AMC's stock price has been climbing higher and higher, much to the delight of its investors.

This sudden surge in AMC's stock price has caught the attention of short-sellers who are betting against the company's future success. And to short a stock, you have to borrow it first. This is where the cost to borrow comes in.

According to Ortex, the average cost to borrow AMC stock is 256.22%. That's already a pretty steep price to pay, but on Wednesday, things got even crazier when the cost to borrow shot up to a staggering 731.8% for 100,000 shares. That's enough to make even the most seasoned trader do a double-take.

What Does This Mean for Short-Sellers?

Well, short-sellers, it looks like you're in a bit of a pickle. With the cost to borrow at such an astronomical level, it's becoming increasingly difficult and expensive to short AMC's stock. Some short-sellers may be forced to close out their positions altogether, which could lead to even more buying pressure on the stock.

But hey, if you're a short-seller, you probably already knew the risks involved. After all, the stock market is no place for the faint of heart. And if you're going to bet against a company that's beloved by millions of retail investors, you better have nerves of steel.

AMC's High Short Interest

Speaking of short-sellers, let's talk about why they're targeting AMC in the first place. It all comes down to the company's high short interest, which currently stands at 23.18%. In other words, there are a lot of investors out there who are betting against AMC's future success.

But here's the thing: with AMC's stock price soaring, these short-sellers are feeling the heat. And the higher the stock price goes, the more painful their losses become. It's a classic case of "short-squeeze," where short-sellers are forced to buy back shares at a higher price to cover their losses, which, in turn, drives the stock price even higher.

AMC's Incredible Run

Of course, all of this begs the question: why is AMC's stock price going up in the first place? Well, it's all thanks to the army of retail investors who have been buying up shares of the company in droves. These investors, many of whom are part of the Reddit community r/WallStreetBets, are betting that AMC's fortunes will turn around as the pandemic subsides and people start going back to the movies.

And so far, their bets are paying off. AMC's shares have risen more than 44% in the past week alone, and nearly 70% year-to-date. That's an incredible run by any standard, especially for a company that was on the brink of collapse not too long ago.

Hold on to your hats, because AMC Entertainment has more short sellers than a Black Friday sale has shoppers. And with the recent surge in retail buying pressure, it seems likely that an AMC short squeeze is on the horizon.

As for how high the stock will soar, it's anyone's guess. Perhaps it will ascend to the heavens like the theater's iconic logo, or perhaps it will plummet to the ground like a subpar sequel. But one thing is certain, it's going to be one hell of a wild ride.

In 2021 alone, AMC shares rocketed over 3,000% before hitting a record high of $72 per share. That's enough to make even the most seasoned investors feel like they're riding a roller coaster with their stomachs flipping with every twist and turn.

But fear not, if you're holding onto AMC shares, you're in excellent company. If a short squeeze does occur, you can sit back and watch as the short sellers scramble to cover their positions, as if they're running from a pack of crazed moviegoers.

So, fasten your seatbelts and prepare for the ride of a lifetime. With AMC Entertainment on the threshold list and short sellers feeling the squeeze, it's anyone's guess where this stonk market will take us next. One thing is for sure, it's going to be a blockbuster performance.

The Threshold List

But all this success has come at a price. AMC is now on the "threshold list" for 13 consecutive days, which means that more than 10,000 failed trades have occurred with the company's shares. In other words, there are a lot of investors out there who want to buy shares of AMC, but there simply aren't enough to go around.

So what happens next? Well, if AMC stays on the threshold list for a certain amount of time, it could trigger what's known as a "buy-in." This means that the brokers who lent out shares to short-sellers would be required to buy back those shares at whatever price they can get, regardless of how high the price has gone.

In other words, the short-sellers would be in a world of hurt. But for the rest of us, it could be an opportunity to cash in on our investment in AMC. So if you're holding onto shares of the company, you might want to buckle up and enjoy the ride. Who knows where this crazy stonk market will take us next?

In conclusion, the stonk market is a wild and unpredictable place, and the recent surge in AMC's stock price is just the latest example of that. With the cost to borrow at an all-time high and short-sellers feeling the squeeze, it's anyone's guess where things will go from here. But one thing's for sure: it's going to be a bumpy ride. So hold on tight, folks, and don't forget to bring your popcorn. After all, this is a movie theater company we're talking about.

Disclaimer:

Disclaimer: This article is not intended to be financial advice. If you take any financial advice from me, you probably shouldn't be investing in the first place. I once bought a stock because the company had a cute logo, so yeah, let that sink in.

And for all you short sellers out there, a word of warning: it's about to get ugly. The bulls are running rampant, and they're not messing around. If you don't want to end up like a gazelle in the Serengeti, you might want to rethink your position. Or, you know, just grab some popcorn and enjoy the show. Either way, it's going to be one heck of a ride!

With that said, it's time for me to sign off and go watch the latest episode of Squid Game. Good luck out there, investors! May the odds be ever in your favor.

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