Today I Want to explain the new AMC dilution document and give my thoughts as to whether it's good for the squeeze or bad for the squeeze. I Want to talk about how I think that it's good for the short squeeze, but bad for the motherable short squeezes. Now I think there's a very important distinction to be made here as those are two separate things. and I want to explain how each is impacted.

so stay tuned and let's make some money. And now I'll drive straight in with the information. So Day Trader POS tweet is saying AMC will now be doing a 40 million share at the market offering instead of 25 million shares. Now we know that it's a 40 million offering instead of a 25 million share offering not on top of that offering because these funds and institutions exercised their overallotments.

Clause That means they've scrapped the 25 million share offering and are now doing 40 million shares. 40 million shares post split is the same as 400 million shares pre-split So let's talk about the difference between a short Suite Peace and the mother of all short squeezes and talk about how each is impacted. So in terms of a short squeeze, we've seen a lot of different examples over the years of actual short squeezes. Tesla was a short squeeze that happened over a number of years.

Carvana is a short squeeze that's currently happening and Booking.com is a short squeeze which happened over a near 20-year period. Some of these short squeezes take a long time. Some of these short squeezes happen very fast, but importantly, none of them are the mother oval short squeezes. So a regular standard short squeeze assumes there is zero synthetic shares and no illegal activity going on.

The company improves either instantaneously or over time, causing the share price to go up. When that share price goes up, the Shorts end up closing out of their short positions and the stock always makes a new all-time high. Now, we're not talking about prices in terms of hundreds of thousands of dollars per share, or millions of dollars per share, or even tens of thousands of dollars per share, but we're talking about a respectable stock price. For example, Booking.com is currently trading over three thousand dollars per share.

It has a market cap of 109 billion dollars that's a hundred times the size of AMC give or take and is a very successful company. Now in terms of Tesla, even though the stock price is lower per share at 246 dollars, the market cap is seven times the size of Booking.com at over 700 million dollars. These examples of short squeezes are where the companies improved and became the best in their industry, forcing the Shorts to close out of their short positions. If AMC experiences a regular short squeeze, the share price would definitely increase, potentially setting a new all-time high by maybe say five or ten dollars per share.

If AMC continues this streak of profitability, it pays down its debt. It improves that current balance sheet as it's currently doing at the moment. AMC Stock will definitely improve and will one day set a new all-time high that is guaranteed now. I Know my video yesterday I Say that I never use the word guaranteed unless I'm 100 Absolutely positive.

If AMC had zero debt, it was setting new profitability records and was making tons of money hand over fist. AMC would absolutely guaranteed set a new all-time high. There's a big difference between setting a new all-time high at 72 273 dollars pre-split or seven hundred and twenty dollars seven hundred and thirty dollars post split and setting a new all-time high at ten thousand dollars per share fifty thousand dollars per share or above. To get those kind of prices, you need a mother of short squeezes.

To get a mother of short squeezes, you need billions of synthetic shares. You need the shorts to be trapped. You need multiple hedge funds or multiple Banks all at once to be liquidated, causing unimaginable new highs in the share price. You'd need a market cap bigger than Tesla.

You need a market cap bigger than Apple AMC Would have to become a trillion dollar company for it to really experience the mother of all short switches. You can also currently get a guaranteed free share of Tesla or of Google and an additional 15 free shares on top of that, which you could always use to buy more shares of AMC or of GameStop. All you have to do is sign up to MooMoo using the link in the description below and make the require wide qualifying temporary deposit. Signing up to move is free and it's easy.

It just requires that temporary deposit and it's a really great way to help support my channel. But on top of that, MooMoo is also very easy to use. They've got tons of technical indicators and advanced charting tools and their own options trading platforms. Some examples of those are Volkswagen and D G A Z-f two individual stocks that at one point became the most expensive stocks on the entire US market.

some of the most expensive stocks in the entire world. These are obviously very short-term events that come as a result of shorts being backed into a corner and forced to close out of their positions while they're all being liquidated. Now, the reason why dilution is bad for the mother of all short squeezes is because every single share that AMC issues is one less synthetic share. Synthetic shares arise because shares have been shorted without first being located.

But all of a sudden, if you create a new share, that's a share that can can be used as a locate for that synthetic Shore therefore making it become non-synthetic as more shares are issued, the less synthetic shares there are out there, and the less trapped Shorts actually are. They're less trapped because they can use all these new shares to locate their shorts and therefore hold legal short positions and therefore close out of those legal shorts without a massive impact on the price. Because each short they cover, a new share is being issued for that short, they can buy those shares at the current offering price or that at the market value, buying up that share, closing out of that short without impacting the current price. And that's because that share isn't being bought on the open market, pushing the price up, it's being bought from this new issuance of shares.

this new collection that's currently separate from the market. But obviously, as I said, this new share issuance, all this dilution is good for a regular short squeeze because Adam Aaron can use this cash to pay down debt and help AMC become even more successful as AMC becomes even more profitable instead of generating millions of dollars in profits, is generating billions of dollars in profits and has billions or if not hundreds of billions of cash on hand. AMC would indeed be a very successful company, guaranteeing it a new all-time high share price. So I think in terms of whether you think this new dilution is good or bad really depends on what you're in the AMC pay for.

Are you in the AMC play for a short squeeze for it to hit 700 per share? or are you in the play for a mother of all short squeezes hoping for it to hit tens of thousands of dollars per share? Now you may ask Tom Do you think this new shared dilution ends the opportunity or ends the chance to see that mother of all short squeezes? Now my answer is I Definitely don't think it ends the opportunity or the chance to see a mother about short squeezes, but it's definitely bad for the mother of all short Squeezes opportunity. We know there's currently billions of synthetic shares two billion, Four billion, but actually it's likely now even higher. Darren Actually explained why the number of synthetics has increased significantly over the last couple of weeks alone, and therefore this issuance of 400 million shares pre-split or 40 million shares post split is at absolutely not enough to rid those hedge funds of all of their synthetic shares. In fact, only a very small portion Darren tweeted saying he said he wouldn't post anything about AMC until he saw an update worth posting.

Well, here it is. He said the macro POC or point of Control has now shifted from 50 per share down to thirteen dollars. meaning the current share price is where the most volume has been traded throughout the entire history of the stock. What that basically means is these hedge funds created more synthetic shares over the last few weeks than they have done in AMC's entire share history.

They've created more synthetics in the last five weeks alone than they have done in the last two and a half years. So if you thought there was around two and a half billion synthetic shares a few months ago, you can now double that number. If you thought there was 10 billion synthetics a few months ago, U2 can now double that number. However many synthetic you thought there was a few months ago, now double it.

That's what the Shorts have done to get this share price as low as they've got it by trading more volume and more synthetic shares than they have throughout the entire stocks history. As Stephanie pointed out, she said, this is the price action to get AMC removed from being on a New York stock exchanges threshold Securities list. This is crime to cover months and months worth of fail to delivers. They didn't buy these shares, pushing the price up, they've sold and created more synthetics.

That is ultimately why I Don't believe this new share issuance ends the opportunity for a mother of all short squeezes because there's still billions. or I guess after the reverse split, hundreds of millions, maybe even still billions of synthetics out there. But as I said, this new share issuance is definitely not good for the mother of all sure squeezes, It just doesn't ruin it entirely. Now, as I said earlier, we know it's not a 25 million share offering on top of the 40 million making say 65 5 million shares.

It's instead of the 25 million due to this over allotment. Clause Tom Causey tweeted saying the first offering was 25 million shares, they went with 40 million. Which means that Underwriters Akada Banks doing the distribution are using their overallotment option. Investopedia says the underwriters have such an offering may elect to exercise the overallotment option where demand for shares is high and shares are trading above the offering price.

But as Randall Cornett pointed out, that means AMC is actually giving these financial institutions and the Shorts the option to buy even more shares. As I said, this definitely doesn't help us out because it means AMC is allowing the Shorts to buy more shares to close out of more of their synthetics. I Think really? that's because Adam Aaron is focused on causing a regular short squeeze instead of causing the mother of all short squeezes. Adam Aaron I Guess says the CEO is focused on making AMC successful all and focused on making AMC debt free.

While that is technically the job of a CEO to help a company become more successful, debt free, and more profitable I Think zip Trader Charlie does make an excellent point. He says my argument is that retail bailed out AMC for years during the pandemic and therefore he thinks it's time for AMC to bail out retail investors. But it does seem at the moment, AMC is more focused on making AMC a more profitable company, not on bailing out retail investors and causing the moabs. Ultimately, I Don't think this dilution ruins the chance of the mother of all short squeezes, but it definitely doesn't help us.

But I guess technically it does help the chances of a regular short squeeze making AMC more profitable, closer to being debt free and closer to that share price rising up and hitting a new all-time high. So guys, be sure to let me know what you think down in the comments below. And as always, guys, be sure to ding that notification Bell because that way you'll be alerted when I put a new video. Cheers!.

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