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ape army stocks: Carol Roth: Gamestop, AMC was just the beginning, it looks like our entire economy is rigged

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ape army stocks

Edit to add a TL;DR – this is a historical movement growing by the day, and will end up being the biggest redistribution of wealth in human history. When the same hedge funds that we’re currently battling gave us the ability to buy stocks at our fingertips on an app, they saw us as prey. Never in a million years did they think us apes would band together to back them into a corner on their short positions. Once the margin calls start, the computers just start buying back all of the shares at the best available price no matter what that price may be.

ape army stocks

Perhaps you’ve heard the latest chatter on Reddit or elsewhere about the company’s plans to accept cryptocurrency as payment for gift cards and movie tickets. It also plans to sell its AMC-branded popcorn outside the theaters at grocery and convenience stores and shopping mall kiosks. The value of shares and ETFs bought through a share dealing account can fall as well as rise, which could mean getting back less than you originally put in. The company doesn’t appear to have enough capital to survive over the long term. Even more so, these independent economic entities are too hard to control.

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And now, the biggest companies in the world, based on this unprecedented Fed intervention, are now competing with individuals looking to buy homes. All the while, capitalism gets blamed, when this crony-enabled central planning is the one creating the economic havoc and impairing the free markets. Post-Covid, there is surely pent-up demand to return to movie theaters. But, in the interim, there’s been a massive secular change. People with big screen HD TVs at home are bingeing on Netflix NFLX or watching new movies on Disney+ and HBO Max at the same time they hit movie theaters. Many theater fans will return but not enough to support a $41 billion valuation.

That may allow the company to avoid bankruptcy, but original shareholders have been diluted heavily and the company still has negative cash flows. Even in a peak year before Covid, AMC had less than $1 billion in free cash flow which compares unfavorably with its current $41 billion valuation. In the eyes of apes, AMC’s master the stock market share price has been manipulated by Wall Street, with hedge fund giant Citadel, headed by billionaire Ken Griffin, taking on the role of chief villain in their story. AMC’s retail investors believe that short-sellers are trying to bankrupt AMC, and that it’s their duty to somehow teach these pessimists a lesson.

Right now, we have a continuing bubble in fixed income securities, with $14 trillion of negative yielding government debt, as well as this meme stock bubble. AMC CEO Adam Aron has embraced the retail investors buoying his stock, speaking directly to them—and even offering a free, in-theater popcorn giveaway for shareholders. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Reese’s price target is in line with other analyst projections. Per The Wall Street Journal, the median price target on AMC stock is $5 per share, while the high price target is just $16 per share.

The Federal Reserve has created not synthetic shares, but synthetic money, in effect, and instead of the amounts being in millions, they are in the trillions. The result was that more than 400,000 small businesses shuttered permanently , and millions more have struggled to survive. This went down in parallel with 7 tech companies gaining $3.4 trillion in value, and capital raising reaching historic levels, with a record number of IPOs and value of SPAC deals completed during 2020. The big companies were the primary beneficiaries of the small businesses’ fallouts. How many more shares do apes have to buy before our 80% owned becomes %? Just seems like apes been buying and buying and hodling and we’re still not higher than 80%.

The markets and penny stock action were slower this week … It’s the week leading up to the biggest summer holiday of… There is $195 application fee; however, Inc. reserves the right to decline applicants for subjective reasons at any-time. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. Leidos Holdings is the largest government information technology company. It has also actively expanded into hardware, providing the electronics and brains for autonomous ships and building a strong portfolio of classified research capabilities geared for the intelligence and space community. I know a lot of you have questions, and I thought it would be helpful to provide you with some overall context to understand the significance of the movement you just joined.

By pushing back against the 500-million-share proposal — AMC eventually pulled this proxy vote — apes denied the company the opportunity raise capital to put itself on better financial footing. They would rather rig the game, ensure those “in the club” succeed, and get rid of everything else that doesn’t serve that purpose. This is by design, and while Wall Street insiders often refer to these retail investors as dumb money, they are not.

Don’t Go Bargain Hunting With Bed Bath & Beyond Stock

This is for informational purposes only as StocksToTrade is not registered as a securities broker-dealeror an investment adviser. But, in defense, like the rest of the world, the value is increasingly going not to the companies that forge the steel but to the ones that provide the brains that go inside it. Defense electronics and cybersecurity are growing pieces of almost every company’s portfolio. It’s where a lot of the internal investment is going right now. Instead, shares sold off as much as 17% this week following the announcement.

A buddy had already caught the day-trading bug and passed it along to Collins. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. Investing in Airline Stocks in 2023 While these stocks remain cyclical, industry consolidation has created a few winning companies. Companies will often highlight massive contract awards in press releases without explaining that those big dollar figures are often spread out over many years and may be dependent on Congress approving the funds. The defense sector is more than just weapons used on land, sea, and air.

  • Quotes displayed in real-time or delayed by at least 15 minutes.
  • The value of shares and ETFs bought through a share dealing account can fall as well as rise, which could mean getting back less than you originally put in.
  • It’s where a lot of the internal investment is going right now.

He prides himself on being an extremely well-informed investment advisor, financial planner, and wealth manager, guiding clients towards their financial goals through retirement planning and portfolio returns. Defense stocks, like many industrials, tend to be more plodding than high-flying technology or biotech stocks. Defense stocks are best suited for income-oriented investors seeking steady growth and rising dividends rather than immense valuation increases.

But as you’ll see, apes don’t really care about AMC at all. All they care about is furthering their agenda, no matter how misinformed it is. The ape army and other retail investors have told me they are fighting for free market capitalism. They want transparency and their movement is not about these particular stocks, but about having a level playing field.

AMC Entertainment’s emotionally driven retail army doesn’t practice what it preaches.

Collins also predicted that the stock would get a boost from “social and cultural sentiment” toward movie theaters in general. Sean Williams has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

ape army stocks

Hedge funds will be margin called and forced to buy everything all at once and we’ll have the most violent squeeze in the history of short squeezes. You “short” a company when you think the value of the stock is going to go down. When the country locked down and AMC closed their doors and their revenue literally went to $0 overnight, it was a no brainer play for the hedge funds. Covid hit last March and a couple of big hedge funds concocted a plan to drive AMC into bankruptcy by “shorting” it and make a ton of money in the process. The latest rally in the shares of US cinema operator AMC Entertainment comes to show once again that there is strength in numbers. Individual investors co-ordinating themselves through the influential Reddit subgroup WallStreetBets and other social media have managed to double the AMC stock price and push it to the highest level in four years.

It’s defined more broadly to include companies that primarily cater to the Pentagon or other government agencies. The Russian invasion of Ukraine is likely to reverberate through the defense sector for years. The move reignited simmering Cold War-era tensions and provided a horrific reminder of the importance of a strong, modernized military.

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And if the cheapest price someone is willing to sell for is 1,000, or 10,000 or 100,000, well then that’s what the hedge funds have to buy it for. So they started borrowing millions and millions of shares from brokers and sold them “short” at the market price at the time, and they pocketed the cash from the sale. The idea is that the stock price will drop, you can buy them back later at a lower price, and then return the borrowed shares to the broker and keep the difference. If the company goes bankrupt, the stock goes to $0 and they don’t have to buy anything back at all and keep everything.

Compared to the current share price, these targets are much more reflective of AMC’s underlying value, where heavy shareholder dilution has outweighed the benefits stemming from the company cleaning up its balance sheet. Sure, there’s a possibility of another squeeze sending shares back toward their all-time high of $72.62 per share. Yet, compare that to the downside risk of the bottom falling out if/when the “apes” cash out. The AMC shares are currently up 1,200% year-to-date and the company’s market capitalisation is about $12bn.

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And, when they do well, they are viewed as a threat. This has happened time and time again, with big companies quietly- and sometimes overtly- championing burdensome regulation that is anti-competitive. Big businesses can absorb the costs into their large overhead when small businesses can’t. Retail investors own about 80% that means institutions own the rest. If they don’t sell their shares, we will never get to 100% and that’s not bad at all. Therefore we can buy as many shares we want but if we don’t get them all included the shares institutions hold, we will not get to 100%.

Early in the year, the Pentagon sends a funding request to Congress, which then holds hearings to discuss priorities and make final allocation choices over the course of the spring and into the summer. The Pentagon has an insatiable appetite for new equipment. But, with aircraft carriers costing more than $10 billion and F-35 fighters priced at $80 million or more, there are limits to how much the government can buy. To figure out the likely winners and losers, pay attention to the budgeting process. The ability to navigate the Byzantine government procurement process and having thousands of employees with the security clearances necessary to do defense work. Defense IT also remains a priority, with vendors scrambling to provide secure networks and data-rich communications systems to the Pentagon.

While illegal, this practice of selling shares short that a seller has not borrowed has a loophole for market makers. The short interest on AMC stock is about 92 million shares or close to 20% of the company’s float, according to data from market intelligence firm S3 partners. The short sellers are estimated to have lost close to $2bn in mark-to-market losses since the beginning of this year, more than half of which came from this week’s rally. As to the reaction of more conservative investors to the overall meme-stock movement, the 23-year-old embraced the “ape” nickname that has been given to the community of small investors that forced a short squeeze in AMC. AMC’s Aron laid out a clear case in early June to authorize the sale of up to 25 million shares of stock, which would occur in 2022. But enough AMC apes expressed concern about the potential for share-based dilution that Aron and the board again scrapped the idea last week.

Getty ImagesThese are strange times to be an investor. It’s become obvious over the last few years that facts don’t matter in politics and now it looks like the same thing is happening in the investment world. Participating in equity markets has always entailed some risk, but historically, if one performed careful research, paying attention to fundamentals, a rational investment strategy could be devised. Not so with meme stocks, the latest monkey wrench thrown into the grooved gears of Wall Street.

By misinforming others about the culpability of institutional short-selling, apes are trying to lure new investors to what’s effectively become a pump-and-dump scheme. Since the beginning of this week, AMC’s price went up 120%. Still, the Reddit investors are trying to rally the troops, or “ape army” as they call themselves, and take the price higher to squeeze out the short-sellers betting on the AMC stocks’ decline. Speaking to the broader trend of meme stocks, Collins said he thinks retail investors have gained the upper hand in the stock market. The ape agenda also requires bringing in new retail investor capital, which would presumably be tougher to do if AMC were even modestly diluting existing shareholders. Nevertheless, the cash flow data is pretty clear that the company is going to need to sell additional shares if it’s to survive for years to come.

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