Okay folks, so there is no question Amc stock is the most asked about ticker in the history of this channel, and today we need to discuss a big catalyst that is coming for it which to save you the full video if you don't have the time is probably pretty good in the short term, but pretty bad in the long term. And since May Love's Amc has more than 2x gone on one of its most consistent runs we've seen all year, and very importantly is testing a crucial breakout region in an attempt to make a new cycle high and may not be too far off from breaking the last cycle's high. Why is this happening? Well, there are a few reasons: the current and probably very temporary easing of macro tensions has set the stage for very, very ripe runs, not just in the overall market, but especially in these meme revenge names, right? And earlier this week I presented a list of criteria that need to be hit in order for the overall meme revenge trade and trend to continue to heat up. But in this video, I want to talk specifically about Amc because yes, it's in a ripe environment, but it's starting to perform even outside of just the overall ripe environment, right? And in roughly eight days, the biggest thing to happen to Amc stock in probably well over a year is going to occur.

Amc has a very, very specific distribution event that is going to be happening next Friday and the implications are quite important. We'll get to work and I will put the time stamps down below and this video is sponsored by the up to 10 free stocks that you're gonna get when you sign up with Moomoo down below. So on August 4th, Amc puts out a press release saying they've declared a special dividend of an Amc Preferred Equity Unit and this is expected to be paid out at close of business on August 19th, 2022, which is next Friday and is what the Countdown Catalyst is. It's eight days from today Amc Preferred Equity shorthands to what? Well, Ape and the company says that it has applied to list its Amc Preferred Equity Units on the New York Stock Exchange under the symbol Ape, which is going to be starting on August 22nd.

obviously eight being a direct reference to the retail shareholders. Now, what is the situation with Ape and what does it do? Well, Shareholders will receive one eight for each company issued share of Amc Common Stock They own, You own One share of Amc, You get one Ape You own Ten Shares of Amc, You get Ten Eight You own no shares of Amc, You get no Ape. Pretty simple overall, and since there are about 516 million Amc issued shares, well, that means 516 million Ap units should be distributed. The implication here is actually pretty interesting.

Of course, one of the big ideas driving the Amc movement is the concept of naked short selling and a lot of the so-called synthetic ghost shares that potentially could be out there artificially pulling down the price of Amc and creating a massive ghost supply. Amc has a history of massive amounts of failures to deliver, which suggests a high likelihood that there are at least some synthetic shares out there. Some people think the number could reach into the billions. Other people think that it's all the Fugazi.

The Ceo has said that he doesn't see any evidence of synthetic shares, but at the same time he does give in to this idea that it is important to have a share count. Ceo Adam Aaron appears to refer to this specifically by saying this system also helps to clarify who is included in our current shareholders base, who is included, and who is not included. Only folks who have Amc issued chairs will be given Amc issued Ape shares. The idea is that if a lot of brokers and exchanges had shot out a lot of synthetic shares and people were now holding it well.

all of a sudden when the distribution comes, they're going to be like, well, where's my Ape And because each ape is going to be directly registered, well, that means that all of a sudden you can get some really crucial data in regards to how much synthetic shorting there is or whether there is at all. Also, of course, if you are a shareholder who bought synthetic shares from a broker, well, you're still technically entitled to that Ape, right? because for your intensive purposes, you bought a share of Amc. It's not your problem that it's a synthetic share. it's the broker's problem.

And it's probably not their problem either. It's the exchanges problem. But that's a whole nother boat Point is, it does put some pressure on the system because if somebody doesn't get an ape, well, all of a sudden, the responsible party has to go and figure out how to get you that ape, either by buying the limited supply of Ape on the secondary market, or by giving you out the cash value as a distribution. Third thing to know is that Amc will be issuing an I Own Ape Nft to shareholders who get this dividend.

Who cares? Moving on, number four, the big question here is is the dividend delusion And the immediate answer is no, And the long-term answer is yes, The distribution itself is non-dilutive but it is a instrument that is going to be used for dilutive purposes. Company expects that Ap units will serve as a currency. yes, a currency to raise additional equity capital to strengthen its balance sheet including debt repayments, and provide capital for opportunistic and value-changing transformative acquisitions and or investments. Here's a very, very important part to pay attention to if you want an answer to the dilution question Quote: Any dilution caused by future sales of Ap units could adversely affect the market price of the Ap units and and the common stock.

So the answer is yes. While this is not immediately dilutive and isn't inherently dilutive, this is being done for future deluded purposes. It's pretty clear in everything that Adam Aaron has said and in the filings themselves that this is going to be used primarily as a tool for Amc to raise capital. I say this understanding very very well that I may bring out the pitchforks because I saw on a lot of retail forums there's thousands and thousands of people that have a different opinion.

but again from my perspective based on what they are literally saying in the Sec filings and based on what the Ceo has said, well, this is a tool a tool to eventually dilute shareholders in a more creative way. If you are somebody that likes the long-term potential of the company, this is a win because they're going to be able to pay off more debts. But if you're somebody who I would argue is like most people who are buying, this is specifically in this because they think that you're going to get a massive short squeeze. I think that this actually lowers the chances of that happening unless it causes a lot of people to buy in within the period of time that comes in the next 10 to 15 days.

So why not just issue more regular Amc shares If they want to raise capital, why can't they just do the traditional dilution route? Well, that requires shareholder votes and shareholders are not supportive of dilution. And guess what? These Ape shares. These preferred units do not need prior approval. In fact, Amc is pre-authorized already to issue up to 4.5 billion additional shares of Ape, which is about nine times bigger than the Ape distribution is initially going to be.

That's a lot of room for dilution. The summary here and my takeaway is that eighth is a very, very creative way for the people over at Amc to dilute without pissing off their shareholder base, or at least reducing the amount that they are pissing them off. Because they are naming it Ape, they're giving an Nft, and they're also giving into concerns with the share count as well as and most importantly, putting some pressure on short sellers who are going to be sweating any sort of distribution from a company that is potentially very, very deeply shorted, even more than the numbers suggest. In a sense, it almost reminds me of the Inflation Reduction Act that Congress just pushed through because it doesn't really do anything to benefit inflation.

In fact, it might even make it worse, but it is named Inflation Reduction in a similar way. This distribution is named Ticker Ape, but it probably doesn't do much to help the apes over the long run. But unlike the Inflation Reduction Act, there is some good here that isn't related to green energy. The Good: For folks who are looking for this to go up and squeeze short sellers is this catalyst is likely to bring in new attention which it already is doing new buyers and is combined with overall macro conditions that are taking a breather and giving some extra wiggle room and a more conducive environment for rallies to grow on.

Which means that you have all this working in Amc's favor at the same time where the grounds of the market are ripe for Amc to bounce. If this had happened when the market was tanking like it was a few months ago, then this probably would have just been eaten up. The next good is that Ape is going to be direct registered through computer share, which means each share is going to be certified to an owner since every Amc holder prior to the record date will get a share of Ape. That means that at least in the beginning you'll get a view of what Amc trading would naturally look like.

When Ape is first introduced onto the market, it is going to resemble what Amc would really look like if you took out all of the well Fugazi work. And by the way, every stock has Fugazi. The price that you see on the chart is based on what the public exchanges are allowing you to see. It's as simple as that.

That's just how the market is structured. doesn't necessarily mean that there's a huge malicious intent to shield you from the truth, although in some cases there are. But it's just the structure of the market and it's a broad, systematic situation. And then, of course, there's that idea that if there's a lot of synthetic shares out there, well, some of the holders of Amc are going to be inevitably holding synthetic shares, and they're going to be wondering where their Ape is.

or rather, their broker's going to be like, okay, we need this Ape system's not going to be able to find Ape and then all of a sudden, what's going to happen. Well, you got to either buy Ape on the secondary market with a limited float because they've just been issued, or of course, potentially give the cash value of Ape, or overall, and this is what people are really hoping for: Recall Amc shares to the extent that you haven't delivered on eight, forcing covering, and thus rallying up Amc shares. There's also probably the most practical situation here, which is that short sellers are just kind of like. You know what? I don't want to hold through this new risk, I'm going to go ahead and cover before this, and you are starting to see that happen already.

If you look at the Ortec short data week over week, short interest, at least that Ortex is registering is going down. Which is very, very unusual because if you look at the history of Amc and how it trades and its relation to short interest, well, generally speaking, when Amc goes up, short sellers start piling on even more. My takeaway on this catalyst net and in effect is that again, it's a strong catalyst, a strong event to attract attention to put pressure on short sellers to overall draw interest and overall spec capital back into Amc. but over the long run it probably is pretty damn dilutive.

I say probably, but I really don't mean probably. I mean certainly. I would make the case that if this is going to be a good thing for Amc stock, it's got to happen within the next eight to 12 days, probably in the lead up to the actual Ape distribution, but potentially in the days after that as all of a sudden, if there's a lot of synthetic shares, while responsible parties have to figure out how to buy that on the external markets, I would argue that long term this is going to do more to dilute and expand the liquidity of Amc as a total entity versus what we would have had before this at the end of the day, If you want to gauge whether or not something is going to head for a massive squeeze, you need a few different things. You need massive short interest.

You need a low liquidity, and ideally you need something rallying up the price. Anything that helps or hurts those variables is going to make a squeeze more or less likely. But what I will say is hey, you still got a lot of name recognition here, You still have a lot of short sellers that are adamantly shorting this, and well, you still got a lot of people that are kind of like Amc or Die which I said last year was so irrational that it almost becomes rational because if enough people have that view, well eventually something's gonna happen and it's gonna cause the price to start pushing against that liquidity. and all of a sudden shorts are gonna have to cover.

My honest view on the situation is I'm pretty damn surprised despite all of the massive, massive, and really warranted fear this year in the overall market that you had so many folks that really just held on to this and in totality, I don't know that that energy is going to go away anytime soon. It seems like if they could take the massive crash we had this year, well, they could probably take a lot more. Which means regardless of how this ape situation goes, I don't think the Amc store is over yet. Do what you want with Amc stock.

I'm just telling you like I see it. Anyways, that caps off this video. Let us know what you think down below. Make sure to hit that ravishing subscribe button if you want to join us in zip trader u and get 50 off coupon code.

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