Another day, another sale of AMC Preferred Equity Units (NYSE:APE) by Antara Capital. Antara has submitted a new Form 4 showing the sale of 2 million units of APE. On May 18, the event-driven opportunities firm disposed of 1 million shares at an average price of $1.61. The next day, Antara dumped another million shares at an average price of $1.60. Following the two sales, Antara still owns 146.2 million shares of APE stock. As of Feb. 15, Antara had owned 227.32 million shares, which shows the extent of its sales in recent months.
While the number of shares the firm owns is still substantial, it is likely to fall more. Let’s get into the details.
Antara Capital Continues to Sell APE Stock
AMC Entertainment (NYSE:AMC) previously filed a prospectus supplement for the resale of up to 232.43 million shares exclusively for Antara. AMC will not receive any proceeds from Antara’s sales. Antara received these shares through past financing agreements with AMC. Now, the firm seems content on dumping its position after completing its obligations. The sales, which have been dragged out through many months, are likely done in this fashion in order to cause the least amount of market disruption to APE as possible.
Meanwhile, The Street has reported that AMC stock’s failure-to-deliver (FTD) rate reached a two-year high last month, totaling 87.5 million. FTD occurs when one party of a contract is unable to deliver to the other party, and can occur in instruments like stocks and options. The Street added that “When failure-to-delivers reach very high levels, it may be indicative of fraudulent trading behavior.” FTD can also be associated with elevated levels of volatility and “short squeeze potential.”
As of April 30, there were 134.01 million shares of AMC sold short with a combined value of $737.06 million. That’s equivalent to a short interest as a percentage of float of 25.95%. Generally, a short interest above 10% is considered high, while a short interest above 20% is considered very high.
Meanwhile, both AMC and APE shareholders have marked their calendars for June 29 and 30. On those two days, the court will consider the conversion of all APE into AMC.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.