Meme stocks have become very popular lately, and the latest story is without a doubt one of the biggest trading battles in Wall Street’s history. A dirty game of chicken is going on between Hedge fund brokers and retail investors, who’s going to win?
What happened with AMC?
While AMC’s stock value was completely down last year, the people just decided to take the matter into their own hands by purchasing loads of shares at 2$ a pop. This is how a stock becomes a meme stock, and it obviously attracts a lot of new investors trying their luck with the best automated trading platform on the market.
Now, while the stock price of AMC is floating around $40 and $50, thousands of retail investors, also called Apes, are awaiting the squeeze (a huge increase in the stock price). That said, it seems that shares and reports are being manipulated, making things even more obscure for retail investors who bought tons of shares lately.
AMC Stock Dark Pool Price leak: It’s over $1500!
A recent leak has shown shares being sold at +$1500 in a dark pool forum. The leaker claims to be a worker at Citadel, the largest US market maker in options. On top of it all, interest reports and numbers are blatantly being manipulated to keep control over AMC’s share value on the public exchange.
Every time the price goes up and that people are buying the dip, another quick short happens, making the price level go down again, despite retail investors owning more than 80% of AMC’s market value at the moment.
What’s a Dark Pool?
A dark pool is a private financial exchange where trades are done in the background, not directly affecting the current market price of said stock. That way, these private investors can place enormous orders without changing the game too much.
Why does the price of a stock go up and down?
Of course, if you never invested in stocks before, it might be a bit confusing. Simply put, when big investors decide to sell their shares, that causes the price of a company’s stock to go down, and vice versa. Since the devaluation of security has become very risky nowadays, dark pool tradings are a big advantage for large investments.
For example, let’s say a bank owns 500 000 shares, if they were to sell those, this would cause a huge dip in the stock’s value. But, if they decided to go through a dark pool trade, the related data would be shown only after all buyers have been found, keeping the stock price fairly stabilized.
In the end, we don’t know what’s going to happen in the coming days. It’s a dirty (and pretty risky) game that’s being played between the Apes and Hedge Fund investors. Are you going to buy a few shares of AMC, just in case?