On July 2, a tweet from Iceberg Research, a short-seller, sent AMC Theaters, one of the best-known retail group stocks, down 4 per cent. Its biggest intraday decline was nearly 12 per cent. Since closing at $2.12 at the end of last year, AMC shares are well off their June 2 peak of $72.62, but are still up 2,500% this year.
What is more interesting to viewers both inside and outside the show is The mysterious Iceberg, which is best known for its public record only for shorting Noble in 2015 with muddy Waters, a famous short seller, which nearly bankrupted noble.
Retail suddenly and violently dozen institutions from the beginning of the drama starts, AMC “ghost shares” continued popularity, such as a large number of short already because of competition from many losses, at present, the means of shares may still has a very high proportion of short, but in this form, Iceberg without taboo “stack” tiger, race “, what is dozen abacus?
How does Iceberg Research rise to fame when it hides below the surface of the water
Although had jointly to experience, Iceberg is not known as muddy water, it is the most famous world war one of the world’s largest commodities trader Noble Group, one of the short (Noble Group), in early 2015 a charges for Noble Group into a 16-year period of several years of decline, the storm company was on the verge of bankruptcy.
Noble, which is based in Hong Kong and listed on the Singapore Exchange, is Asia’s largest commodities trader, with a portfolio of commodities ranging from energy to metals to hard commodities to agricultural products. For a long time, it was the combination of Iceberg and Muddy Waters that led to its downfall.
Iceberg began issuing short reports on Noble in February 2015, calling the group a “repeat” of fraudulent energy trader Enron in its first report, and has since continued to publish a series of allegations, including that Noble made illegal profits by understating its debts through financial fraud and inflating the value of long-term commodity contracts.
Noble subsequently suffered an unprecedented crisis of confidence and continued selling and shorting of the stock, with bets against noble’s free float reaching a record 15.1 per cent at the height of the frenzy.
In March 2015, Noble announced a lawsuit against Arnaud Vagner, the only publicly identified head of Iceberg, who the company described as a former Noble employee and credit analyst who had made a series of allegations of discontent with the company.
However, that did not stop Noble’s slide to the bottom.
In August 2015, Noble made public a lengthy report from pricewaterhousecoopers that said its accounting met international standards. PWC did, however, recommend that Noble improve the way it values some contracts, while Concern over a six-month gap in Iceberg’s report alleging that Noble had falsified billions of dollars in profits prompted a downgrade of noble to “junk” status by Moody’s and STANDARD & Poor’s and a drop from Singapore’s main stock index.
Noble finally failed to turn the tide. After two years of operation crisis, in June 2017, the group’s market value shrank from the peak of $10 billion in 2010 to $300 million. Under the pressure of debt, noble began to sell subsidiaries and sell ships to seek repayment.
In November 2018, Noble’s market value fell to $100 million and it was forced to delist from the exchange and seek restructuring. But after the restructuring, Singapore regulators barred noble from relisting on the local exchange. Noble, which moved its headquarters to London earlier this year, entered bankruptcy protection and sought other ways to raise capital. The giant that rode a decade-long bull market in commodities is finally saying goodbye to its former glory.
Throughout the whole process of Noble’s transition from prosperity to decline, although the end of the bull market of bulk commodities and the volatility of the market is the background of noble’s transition to crisis, Iceberg’s short selling is the last hand that pushes the straw to break the camel’s back.
A few years later, Iceberg went after AMC and tweeted about it, reminiscent of the last three-year battle. Since Iceberg has said in the past that after Noble, it will take positions in the companies it operates on, both long and short, many believe that its real purpose this time is, as its name suggests, to be an Iceberg floating on the surface of the sea.
What is Iceberg’s intention in dating AMC?
Since native trend, may continue to have a mechanism to mix the opportunity to profit in the retail team, however, since the beginning of a group of institutions of opposites to throw in the towel after departure, as vigorously as Iceberg “upwind” act the role of or appeared for the first time, because it has won the exact statistical data, shorting the meme stock risk alarming at this time.
Hedge funds have lost more than $12bn since the start of the year betting against GameStop, AMC and Bed Bath & Beyond alone, according to S3 Partners, a data analytics firm.
A more dangerous sign is that more than half of this year’s $5.1 billion loss in shorting AMC occurred in June, making it hard to imagine anyone publicly declaring that they were betting against AMC for profit, given that most of the losing short players were well-known institutions. Light Street Capital, run by Tiger protege Glen Kacher, for example, is still down about 20%.
Just under the condition of new highs in early June, try to short the AMC is not an attractive option, for bystanders, this is more like a empty city stratagem – knowing that retail on these cliques stocks short squeeze, short positions after intentionally post messages short, operation is doing behind the DORA, at the same time attract the attention of other force empty retail shares.
Since Iceberg has announced that its future moves will be long and short, this may not be a reprise of its short position in Noble. After all, in the last war, it made it clear that it did not own any shares in Noble at the time, but only “to let the world know that Iceberg exists”.
It is only a simple blog website, in addition to the founder of Wagner, there is no detailed information about the company’s disclosure, so much so that many new attention to the institution investors believe that this and just before a shell company called the glacier research as a fad, which claims to short GME, but also discovered the corresponding information is false information.
Will AMC be knocked down by its unbreakable group?
AMC’s share price rose this time thanks to heavy trading of stock options, unlike previous retail short-selling battles.
A stock option is a type of derivative product that allows a buyer to buy or sell shares at a fixed price in the future, depending on how the share price moves. As the stock soared, market makers selling AMC options were forced to buy the company’s shares to offset their exposure, a phenomenon known as a gamma squeeze that would drive the stock higher.
Wall Street analysts say AMC is trading at 45 times forecast 2022 earnings before interest, tax, depreciation and amortisation — cinema stocks typically trade at around 10 times at normal levels — and there is no doubt AMC is a huge bubble, but it has a reasonable background.
According to VandaTrack and jpmorgan, more than 10 million new brokerage accounts were opened in the United States in the first half of this year, more than all of 2020 combined, while retail investors bought nearly $28 billion in stocks and funds on a net basis in June, the highest since 2014. That means the market as a whole is at its highest level for some time.
The trend is clearly driven by retail investors, with the Wall Street Journal revealing that more than 70% of retail investors believe the rise will continue over the next three months, while only 44% of professional traders are optimistic over the same period. For a group stock like AMC, retail investors act as a form of insurance: the more people who bet, the less likely it is to be beaten by shorts.
To be sure, it is hard for the usual short-selling practices to have a lasting material impact on the stock. Iceberg claims that AMC’s fundamentals have value problems, that they are an unsustainable rise driven by options and sentiment. But how can it be fated by such accusations if the investors’ starting point itself has nothing to do with fundamentals? As for the latter, even WSB forum followers should not be surprised, as this is exactly what they are pushing for.
Still, AMC is showing some signs that its rally may be nearing an end, with prices and stock trading volume accelerating, volatility increasing, and the ratio of bullish to bearish trading volume turning lower. It’s not surprising that trend-driven stocks eventually calm down when the tide falls. Sentiment can drive a 2,000% rally, but extending it is not something investors want to do.
According to Bank of America, 21% of AMC’s outstanding shares are still shorted, compared with 5% for the typical stock. Perhaps the real time to short will be when stocks trade back close to replacement cost, a return to value that won’t be easy for a stock like AMC.
conclusion
Among the followers of WSB concept, more people believe that Iceberg, if it is sincere in shorting AMC, should understand the current market situation better and give up this idea. The organization, which has no real address to find, lacks control over emotion-driven Meme stocks, which belong only to the market.
Iceberg may be an Iceberg, but fighting the frenzy only melts the Iceberg. If its ultimate goal is to make money, it may just be a distraction. After all, Iceberg doesn’t even make comments.
Article | U.S. stocks club (meigushe)