Okay folks, so we have to talk violently about Amc stock and some possible scenarios that I see playing out with it in Q1 of 2022 and beyond. So full context: First: February 21st, 2020, Amc is trading at 7.50 cents. Pandemic fear breaks out. Amc goes from 750 to two dollars.

Over the next year, most of its feeders are shut down and Shorts pile on the stock, betting that it'll never recover. And of course, the lowered price that was accelerated by short sellers makes it a lot more difficult for Amc to raise capital at appropriate prices. And then, despite the news of Vaccine and most other covet adverse stocks rallying to new highs, Amc driven down by short sellers and also the ripple effects of dilution drops it to new lows at 191 as late as January 5th, 2021. And again, this is at the same time when a lot of other stocks recovery stocks were going parabolic.

But then, what happens? Well, you have a huge surge of retail traders in the market january and February, which historically tends to be months that tend to do very well in terms of retail participation. But regardless, retail participation came into new highs and more retail participants were becoming aware of the Amc situation and the high Amc short interest and what do they do? They buy in in mass that induces more people to buy in. Amc goes from a dollar ninety one to within a few weeks nineteen dollars and eighty eight cents. And short sellers think, oh, this is our lucky day, blah blah blah blah they pile on more, the buy button disappears.

It goes back down to five dollars. Short sellers made huge instant profits, but of course they wanted down more. You know the story. Few cover, and over the next few months you have a huge growing following of retail traders pissed off about getting the buy button removed, upset about a lot of the market transparency issues that they saw as a result of this whole ordeal.

And they're upset about the double standard in terms of how retail traders are treated, and how well hedge funds and institutional money are treated. And let's be real to a lot of people. Before that first buy button removal back in January, Amc was just a stupid Wall Street Bets degenerative gamble play. But after the buy button was removed and a lot of retail traders saw how the cards were stacked against us and how this was happening across the entire market in lesser forms, but just as malicious.

all of a sudden, those blinders were cut away and it was no longer a degenerative gamble play, but rather a play that sends a message and a play where the numbers actually may make sense if short sellers do have to cover at much higher prices. That's where we started. really. Originally talking about it on the channel, I felt that the setup of retail traders stubbornly holding at this point combined with high short interest would eventually lead to a positive result.

But at the very least, short selling was an important topic to discuss because it was something that was happening all across the market with many, many different retail heavy plays. stocks that hedge funds had been piling into massively in January and February and inducing retail traders to fomo into them were then now getting pummeled by those same hedge funds and inducing people to panic, sale and falling right into the hedge funds pockets once again. And Amc was the perfect symbol to describe the Bs that we were seeing pretty much everywhere. and the insane tactics that short sellers, whether justified or not in their short thesis, used to get these types of stocks down and a lot of retail got interested in the story.

In fact, if you look at the top 10 searched Google news stories in the entire world for 2021, number one was Afghanistan, number two was Amc stock, and number three was the Covid Vaccine. Imagine that Amc stock news stories only second to Afghanistan and one ahead of the vaccine. Those other two topics are things that really affect the entire world more or less. one in terms of foreign policy and one in terms of our day-to-day life.

Big philosophical debates on both. Yet, Emc stock was right smack in the middle of these two. You don't see that in the stock market. The stock market is a much smaller audience.

And they weren't googling Amc the movie theater chain. They were googling Amc. Stuck. that shows you just how insane and broad of an appeal this whole Amc stock short seller situation had.

But anyways, Eventually the heat got turned up so much that you got this huge wave of purchases at the end of May and then early June which led to a gamma squeeze and a massive push into the 70 region, which then led to more short attacks with short sellers expecting that to go back down to five to ten bucks instantly. But that's not what happened. It in fact held within a holding range for two months, and despite a lot of the fear, selling, and interest rate scares across the market, Well, with all this, Amc still manages to hold at 28 bucks six months later. There's a lot of very strong fundamental plays that got beat down a lot more than Amc did, and Amc doesn't trade on the fundamentals.

Amc is like 14 times where it was in early January 2021. So this has been a very big disaster for short sellers and it's been a very big win for Rito traders at this point. And skin to the point where you're starting to see a lot of short sellers not want to attack any stock, where you have a high chance of retail traders trying to squeeze you out, which is a lot of the market. These movements have also gotten the attention of regulators, and of course you now have Doj investigations probing hedge funds specifically related to short selling.

These retail movements have also brought a lot of attention to the unfair bias and Bs incentives that the media has. It's one thing to run a weekly story saying oh, we don't think that Amc is a buy because fundamentally, it doesn't make sense. It's a whole nother thing to run an article five times a day that says, make sure that you're selling Amc stocks, Sell now Sell Now you're a you're a conspiracy theorist because short interest is a conspiracy. Short sellers don't exist Woo ghosts.

You saw constant articles pretty much everywhere that only play into the hands of, well, institutional smart money that are smart because they have the institutional power to push media to say whatever they want and retail traders are like. Oh, media proved to me doing something. Okay, I can do it now. Can't think for myself because that's weird.

So glad there's these little thinkers for me on all these great media websites. And again, it's not just about Amc stock. You can think whatever you want about movie theater chains. I don't think movie theater chains are the best industry.

I don't think that Amc makes any sense fundamentally anywhere near or the prices, but the attitude of controlling the narrative is so present and was revealed by this Bs. In so many ways, Amc and the symbolism behind Amc and some of the other stocks like Gme have changed the market for the better. But now we're nearing the end of 2021 and there's always been two different stories with Amc stock. Number one, you have the story about a fight for fair representation for retail traders and more transparency, and then number two, you have, well, the actual squeeze itself, and the argument for the squeeze is based on two things really, the relentlessly high short interest and the relentlessly high number of holders in Amc stock, keeping it above the price at which Amc Shorts can reasonably cover without inducing a massive massive increase.

But the issue, unfortunately, is still the same as it was when we used to cover Amc regularly. and that is that absent huge buying pressure that can overwhelm the selling pressure and redirected exchange reporting like we saw here and here, the odds point in favor of short sellers just deferring their short positions. I said this a lot in the summer and in the early Fall, and I continue to believe this: If you have the choice between covering your short positions at a loss and potentially inducing a massive short squeeze as a result, well, you're not going to cover your short position, You're just going to wait and defer it until you can do it profitably and comfortably. The only situation you want is if you get overpowered or the price stagnates for a very very very long time.

And so far you haven't seen the overpowering and you haven't seen enough time, pass for the deferred game to not be effective anymore. And now you also have cost to borrow going into lower and lower lows, which makes it easier for more and more short sellers to accelerate downtrends when the downtrends come in. Now that's the bad news for Amc, and that really hasn't changed much since June. The only difference is that some of the enthusiasm has gone down.

Although you still have a lot of legacy holders that oogabooga all the time and aren't going to sell. and that's the good news. Despite the overall bleed and the overall punishing of the market, the holding power so far is still here, to a huge extent, a lot more than most people outside of the Amc Ugas would ever have expected this late in the year. And ultimately the ability of Amc to enjoy a cover induced squeeze from shorts will be based on whether that holding power stays consistent and how long it stays consistent.

So I want to go ahead and talk four different scenarios. so the short seller optimal scenario is Amc slowly drops as retail traders lose faith and the ability of stock to retain enthusiasm causing a downward spiral. If you're betting that your other retail traders are going to be cashing out of Amc, then in that idea, you're going to go and cash out before they do, which causes more and more people to fear more people cashing out and you have that downward spiral. In addition to the already dwindling enthusiasm.

in this scenario, Amc picks up some sideline capital at lower and lower values, but eventually gives away as absent retail holders, the stock will retreat to its fundamental value without the legacy holders propping this up. Obviously, over the long run, market dynamics dictate that it would eventually get to its fundamental value. And in a bear market, if the rest of the market entered into a bear market, it would go far below its fundamental value. In which case, that's when the short sellers would ideally cover because the covering would still cause a rally because of how high the short interest is.

But at that price, you could cause such a small reality that most shorts would still be very profitable and the short covering could be slow and steady enough to be eaten up by the selling pressure. So that I would say is the calculus that a lot of short sellers are banking on, and they probably think that they're going to get that within the next 18 months. Retail traders statistically are very, very fickle with stocks. They buy them when they're up, they sell them when they're down.

That's the math that they see constantly across the market. They've been betting that was going to happen with Amc stock all year. They've been mostly wrong, but they still think that that's going to pay off. Now the next scenario, which I would argue is optimal for oogabooka Amc folks, is that Amc holds retaining power and then a jump in retail participation at any point.

but most effectively in January and February, where retail participation usually does skyrocket well. That could cause inflows into the stock, forcing higher risk, higher leverage shorts to cover early and inducing a widespread cover that results in the anticipated squeeze. Generally speaking, retail participation again booms in the beginning of the year, so if that benefits meme stocks again, a lot of that would probably flow into Amc like it has in previous spikes of retail participation. That trend doesn't have to continue, but the faster that retail participation spike happens, the more likely I would say it is to continue.

If there's not a spike for the next three four years, I don't know that it would just automatically flow back into Amc. I think there'd be something new of that day. This is a 2021 stock. If it becomes a 2022 stock, you have the two attachments very, very close together, and the behavior would probably mimic a lot of what we've seen throughout 2021..

another less exciting, but arguably bullish scenario is that Amc holds a lot of retaining power. Maybe it bleeds some more from where it's at right now as enthusiasm goes down some, but then you get a huge base of legacy holders who refuse to sell, and then eventually because of that, shorts decide to cover and par losses and holders get a nice but less severe spike than in the situation we talked about. Above, forcing shorts to cover is going to make a lot more money than actually having shorts cover on their own accord, but this would still be a win. It would just take a lot longer and wouldn't be as big of a win in terms of profitability.

The idea behind this is that the deferred game stops making sense after a few quarters and especially a few years if you're stuck in, say, the 25 to 26 dollar region for two years. Let's just say, if it's not moving much in either direction, it no longer makes sense to have your capital or your margin deployed in those setups. And all of a sudden it makes sense to start slowly closing out, and then in the middle ground situation, you have Amc slowly dropping. You have enthusiasm waning, but again, some level of legacy holders still holding.

This is a much smaller number of legacy holders than in that bullish situation that we covered earlier, but enough to still make holders relevant. Then after a year or more of that, you have higher price shorts covering profitably lower price shorts, pouring losses, and covering, and you get some modest price increases because of that, and Amc to some extent probably would for a long time hold some elevated value over the fundamentals because of a lot of the legacy holders. So in totality with this, I would say that in reality the deal with Amc stock is going to be based on how many legacy holders are here. If there's a lot of legacy holders and that becomes very, very apparent in the next couple of months, and then you get all of a sudden a boom in retail participation or some sort of catalyst that causes retail participation and specifically Emc stock, then you have that foundation to build off of, And that foundation could add to the likelihood of one of those big squeezes that people have wanted at this point at the end of 2021.

my argument for Amc is that hey, the first story has been very, very successful, been a huge success at empowering retail traders, giving retail traders a bigger voice in the market and identifying a lot of the inequity. There's a lot more awareness that needs to be had, and there's a lot of actual actions that need to be taken. But hey, it's been one of the most successful retail empowering movements ever. But in terms of the squeeze side of the story, it's still a very, very open battleground and only time will tell for certain where it ends.

But at the end of the day, the message is still going to be clear. Okay folks, well that caps off this video. If you have any questions, feel free to reach out to us below or join us on ziptrader snorkel if you'd like to learn how to trade. With our step-by-step lessons, our private chat, our daily morning briefings, as well as our full price target list, and all future updates, make sure to go ahead and click the link below Coupon code: goodbye 2021.

We'll get you a sizable discount before checkout Anyways, folks, that's it for today. Have a good one and I'll see you in the next video.