Question: Is AMC Short/Put really such a no-brainer right now??
Hi all, I am planning to extend my short / put position on AMC on Monday because my interpretation is this whole thing is the no-brainer of the year. On August 22, the $APE will start trading and it will dilute the economic and control interest of $AMC stock by issuing another 100% shares. The Apes are irrational so I realize it will not cut the stock price in half but I cannot believe it will not drop…
Further, it is crystal clear that Management is planning to raise more capital via a prefshare issuance with subsequent conversion. If I had to make a bet, I’d say they need to do that prior Q2 23 because cash will get real tight then and deferred lease payments become due.
Because this is a share issuance and not a split there will be no adjustment of option prices etc. as well (?)
So I think a combination of shorting shares (as we cannot exactly know when Management will pull the trigger on further dilution) plus puts that expire 2 weeks after the Aug 22 issuance.
What really confuses me is that the option chain has not reacted to this so far, it is still as if there was no dilution coming in 2 weeks.
Sept 2nd Puts from yahoo finance
Is there something I am not seeing here? It seems to be a no-brainer to buy say 20$ puts??
Submitted August 07, 2022 at 12:51PM by This_Professor8379
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