Welcome back to the channel everyone today, i want to talk about whether amc can really hit a hundred thousand dollars per share, so stay tuned and let's make some money - and i wan na dive straight in with the information. So in this video we're gon na focus on these seven things that i've laid out on the screen, we're going to talk about how shorting on margin really works and how the hedge funds are going to be liquidated. How a short squeeze actually works. How long it's going to last and how many people are going to be able to sell at the very tippy top what values are going to be involved? What variables actually exist if the hedges are going to want to pay and if they can say no? Will the squeeze be stopped and do the hedges have a way out now? I do want to preface this video by saying there are a lot of variables and different people are going to have different opinions on those variables.

There's also some things in here that i can't say with 100 certainty such as whether the squeeze will be stopped and if they have a way out or not again, people are going to have different opinions on these things either way. So, let's start by talking about how shorting on margin actually works from looking at amc, we can see that amc has a market cap of around 10 billion dollars and obviously amc has a float of around 500 million shares. So, let's take citadel as a prime example. We know that citadel has a portfolio of around 250 billion dollars.

They actually have equity of around 40 to 50 billion and they're, using around seven to one leverage giving them assets of around 250 billion. So let's say that citadel have used 50 billion of that to shaw amc. Obviously that would mean that citadel are shorting 2.5 billion shares of amc and have therefore created about 2 billion synthetics and shorted the entire flow. So we've now come across our first variable.

How many shares of amc are citadel really shorting? Is it 2.5 billion? Is it 20 billion shares? Is it 500 million shares, or is it only 100 million shares or even less? We know that citadel aren't going to be the only hedge fund, shorting amc there's going to be other funds, shorting amc as well. Maybe all of the other funds total up to 20 billion shares. But again, maybe all of the funds totaled together is only equal to 1 billion shares. But let's just stick with my example of 2.5 billion shares for citadel, which is around 50 billion dollars just because the numbers are round and easy to calculate.

So, let's just say that citadel started shorting their 50 billion dollars of amc tomorrow when the market opens, when amc is around 20 dollars per share. Now, let's say the price of amc increases from 20 per share to 40 per share. That's a 100 price move and therefore citadel would be down 100 of their short position, meaning citadel would have lost 50 billion dollars. Now.

Let's say that amc ran from 20 to sixty dollars per share. That is a two hundred percent price movement and therefore citadel would be down two hundred percent on their initial 50 billion dollar short position. They would have lost 50 billion dollars and they would have lost another 50 billion dollars, meaning in total they'd be down 100 billion. Now, for citadel to orchestrate that they'd have to sell off 50 billion dollars worth of their other stocks and make it available for margin requirements.

Obviously, they'd be down over 100 on their short position and their total short position would start moving negatively against them, meaning they'd have to stump up that extra margin. Collateral so effectively citadel would have lost the original 50 billion dollars they put into the short position and their account would have also lost another 50 billion dollars, because the price has moved against them by 200 percent. Now again, if the price of amc rose from 20 per share to 80 per share citadel would be down. In total, around 150 billion dollars, they'd have lost their original 50 billion and they'd be down an extra 100 billion, because the price of amc would have moved by 300 against them again.

They'd have to sell off another 50 billion dollars worth of their stocks, and they'd have to have a hundred billion dollars in margin capital in their account to obviously be consumed by this trade. And now, let's assume that amc ran all the way from twenty dollars per share up to a hundred and twenty dollars per share. That means the price of amc would have moved against them by around five hundred percent, meaning they'd be down the full 250 billion dollars. They'd have lost the original 50 billion dollars and the extra 200 billion dollars, because the price of amc moved against them by 500 percent, meaning they'd need all 250 billion dollars of margin capital available to sustain this trade as soon as amc ticks over to 121 dollars Per share citadel would effectively be liquidated and forced to use the entire 250 billion dollars in their account to buy back those amc shares.

Obviously, then, the art of citadel placing a market buy order for 2.5 billion amc shares to close out their full position. Would pretty much buy all of the shares that are available in the market right now, and the price of amc would skyrocket? Now again, i think we've got another bit of a variable here: do citadel actually place a market by order or do they place limit? Buy orders and try and buy amc shares at a reasonable price instead of just buying every single share available in the market, all the way up to a thousand dollars, five thousand ten thousand fifty thousand dollars per share, and, above again the answer to this. I don't actually know i don't know whether, when hedge funds get liquidated, they have to market by to cover their position or if they can limit, buy and limit sale. Now you might say well, tom 120 per share doesn't really sound like that much.

How is amc supposed to run all the way to a hundred thousand dollars per share, and i think this is where we're going to have another one of those variables does citadel, actually have a short position of 2.5 billion shares, which is already worth 50 billion dollars. If citadel is already shorting, 2.5 billion shares worth 50 billion dollars, then effectively. Amc can only run to 120 per share before citadel is liquidated. Obviously, at that point, citadel are going to have to place that market by order to buy back all of those shares.

But maybe citadel is only shorting, 250 million shares of amc and there's a bunch of hedge funds that are also shorting. A similar amount of shares and that's how we get to the total of 2.5 to 20 billion shares shorted, in which case, if citadel, are only shorting, 250 million shares. That means their total short position at the moment is only worth around five billion dollars and in which case you can pretty much multiply all of these prices by 10 to get the liquidation point so citadel will be liquidated at around 1 200 per share, not 120. Now you might say well that sounds a bit more reasonable.

Some smaller hedge funds are going to be liquidated at the one to two hundred dollar price bracket, but citadel aren't going to be liquidated until over a thousand dollars per share as they're the big guys and then obviously, when citadel market buy their 2.5 billion shares. A thousand dollars per share each then they'll be fully liquidated and forced to close out of their position, and i think when you then have a number of funds getting liquidated. All at that 1 200 price point and all having to market buy shares of amc. Then we could start to see amc run to very, very, very high numbers.

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That's over a two to three day period. We can see that on the morning of october 27th, volkswagen gapped up massively. It then ran up, and obviously, during the morning of the 28th, volkswagen squeezed all the way to a thousand dollars per share. But then, throughout the course of the rest of the day and the following day.

After october 29th, volkswagen fell significantly and a few days after it was back down to its original price. Now, what i want to mostly pay attention to here on the volkswagen squeeze chart is this point here at the very, very tippy top. As you can see, the very tippy top only lasts for one singular bar and very close to the top of the squeeze. Is three bars in time? So does the volkswagen squeeze chart look like this, where volkswagen runs up, hits the very tippy top and stays at the very tippy top for hours and hours and days and days or does volkswagen run up touch this very tippy top and then fall back down very Quickly, after after only a few bars at that top range, what i'm basically saying is that, when amc squeezes, you aren't going to have hours and hours and days and days to sell your shares at the top of the squeeze.

Maybe amc does squeeze to over a hundred thousand dollars per share and your sell order is triggered at that point and you sell your shares. But what happens if amc only runs to ninety thousand 000 per share? Well, your sell order won't be triggered and you'll have to cancel your sell order and reset it and you'll sell your amc at some point lower. Now i think, if amc is to squeeze up to a hundred thousand dollars per share, it's only going to stay at that range for a matter of seconds. It's then gon na fall back down very very quickly.

Amc may spend some time at a thousand dollars per share, five thousand dollars per share, or maybe even higher. It may hang around that one to five thousand dollars per share for a few days and if not a few weeks, but i think when it runs to a hundred thousand dollars per share, it's only going to be there for a matter of seconds. Similarly, to that due diligence and that chart, i went through some time ago, showing the geometric mean most people gon na sell their amc shares at one to five thousand dollars per share, and only a small handful of people are going to be able to sell at The very tippy top again, let's assume amc, doesn't actually hit a hundred thousand dollars per share. It only hits ninety thousand dollars per share.

In that instance, there may only be two or three people that have their sell orders at ninety thousand dollars per share or below most other people are going to have their sale orders around one to five thousand dollars per share and a hundred thousand dollars per share And over those with their sell orders, a hundred thousand dollars per share and over aren't going to be triggered if amc only runs to 90 000 per share and those people that didn't have their sellers triggered are gon na cancel their sell orders and sell amc when It falls back down to one to five thousand dollars per share. I think the thought of all four million apes being able to sell their shares a hundred thousand dollars per share is very very incorrect if there is actually 2.5 billion. Synthetic amc shares. All of those being sold at 100, 000 per share is 250 trillion dollars and obviously the dtcc doesn't have that much money.

The dtcc's insurance fund, which is the collective value of all of the assets in the members of the dtcc, is only around 60 trillion dollars and therefore they wouldn't be able to afford it. But i don't think that's gon na be an issue because all four million apes aren't going to be selling their 2.5 billion shares a hundred thousand dollars per share. There may only be two or three apes that can sell for that value and everybody else is going to be selling for one to five thousand dollars per share. Now i want to talk about the values involved.

Currently, amc is around 20 per share and has a market cap of around 10 billion dollars. A 200 amc would have a market cap of around 100 billion dollars. A two thousand dollar per share amc would give it a market cap of around one trillion dollars which would make it one of the most valuable companies in the entire stock exchange, not the most valuable, but one of a twenty thousand dollar per share amc will give It a market cap of around ten trillion dollars, which would make it by far the most valuable stock on the entire stock exchange. Now, when volkswagen squeezed volkswagen was the most valuable stock on the stock exchange for a short while, therefore, i don't think it's unreasonable for amc to be the most valuable stock on the stock exchange for a very short while, as i just said, when amc squeezes, it Will hang around the one to five thousand dollar per share mark for a little while giving it a valuation of between 500 billion to around 5 trillion and then, as amc potentially runs up to around a hundred thousand dollars per share or ninety thousand dollars per share? Or maybe even only twenty thousand dollars per share for a matter of seconds, it will be the most valuable company on the stock exchange but, as i said, only for a few seconds, amc isn't gon na sit around twenty thousand to a hundred thousand dollars per share.

For days and days and weeks and weeks, it'll only be sat there for a matter of seconds now i've kind of touched on some of the variables that we're going to experience during the squeeze earlier in this video, obviously the main variable. How many synthetic shares is there? Is there two billion synthetics, 20 billion synthetics, or maybe only a few hundred million synthetics, but obviously the more synthetics of amc that there are means that amc will have a higher market cap? Don't forget that these market cap figures here are based on amc's real flow of 500 million shares, but obviously, if amc actually has 2.5 billion shares, then at 20 amc has a market cap of around 50 billion dollars and at 20 000 per share. Amc would have a market cap of around 50 trillion dollars now again, while i think 10 trillion dollars is potentially realistic for a very short time period, 50 trillion dollars, maybe less so, because that bankrupts the majority of the dtcc to buy back those shares. However, again, as i said, the dtcc isn't gon na be buying back every single share at twenty thousand dollars per share.

The majority are going to be bought back between a thousand to five thousand dollars, with only very few being bought back at 20, 000 or higher. So i guess the main variables are how many synthetics actually are there and how many synthetics are being held by one individual hedge fund or basically, how many synthetics does each hedge fund hold next up on the list is: will the hedge funds want to pay and Can they say no when a hedge fund is liquidated, it doesn't really have a say in the matter, as somebody external is appointed to liquidate their portfolios and cover their shorts? Obviously, when archaegos was liquidated, archagos wasn't the one choosing when to sell shares and when to cover shorts credit, suites stepped in and sold off their portfolio for them and therefore, when a hedge fund gets liquidated, it doesn't really have a say in the matter and is Forced to cover their shorts and buy back those shares. Therefore, when hedge funds start being liquidated, we are guaranteed to have our amc shares bought from us. The next question is: will it be stopped again? I think this is another variable.

Will the sec step in and stop the squeeze? I don't know: can they step in and stop the squeeze? Yes because they have the right to non-regulatory hosts, but will the sec step in? Will the dtcc step in will other hedge funds and market makers step in? Will the fed step in my answer is right now i don't know because it's a variable, i'm actually going to make an entirely separate video on this and talk about whether amc is going to be a managed squeeze or whether it's going to be free to occur. Now the very last question on the list is: do the hedges have a way out? I think the very short answer is no. The hedges don't have a way out the hedgy shorted these shares and they need to cover them again. I think this needs an entirely separate video as to whether these shorts can be covered in a dark pool or not whether these synthetics can be deleted and never covered, and so much more now.

I hope that's helped answer your question as to whether a hundred thousand dollars per amc share is really reasonable. Personally, i do think it's possible, but it does depend heavily on the variables how many synthetic shares are out there, how many synthetic shares are held by each individual firm and how long is amc going to stay at these very high prices? Is amc hold a hundred thousand dollars for hours and hours and hours or seconds how many shares are going to be sold at that hundred thousand dollar mark? Is there two billion shares that are going to be sold for a hundred thousand dollars per share each or only a small handful, maybe 10 or 20 shares sold at that level, and how many synthetic shares are actually out there? Is there hundreds of millions or is there billions and billions? Obviously, if there's billions of synthetics, it makes it a lot more likely for these hedge funds to be liquidated, because they'll have billions of shares to buy back. But if there's billions and billions of shares out there, it makes price targets like a hundred thousand dollars per share more unrealistic. If there is 2.5 billion synthetics, a hundred thousand dollars per share for all of those synthetics would be over 250 trillion dollars again.

If there's 20 billion synthetics at a hundred thousand dollars per share, that makes it closer to 2 000 trillion or two quadrillion dollars in total, guys be sure to. Let me know down in the comments below whether you think that amc can really hit a hundred thousand dollars per share and, as always guys, if you enjoyed this video, be sure to check out some of my others. Alternatively, subscribe to the channel and ding that notification bell, because that way, you'll be alerted when i upload a new video cheers.