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AMC Stock: Apes’ Battle Against Dark Pools

The debate about whether AMC shares have been under pressure due to dark pool trading has been heated on social media lately. Wall Street Memes takes a closer look.

AMC stock  (AMC) - Get AMC Entertainment Holdings, Inc. Class A Report has been down more than 30% since the beginning of July. But apes continue to hang on to shares with unshakable confidence, as they look forward to the “MOASS” – mother of all short squeezes.

Recently, the debate over whether dark pools have been undermining AMC stock has gained prominence on Reddit's main forums. Is this one of the key reasons why AMC shares have not made it to the moon yet?

Figure 1: Dark pool.

Figure 1: Dark pool.

(Read more from Wall Street Memes: Brace For The Mother Of All Short Squeezes)

What are dark pools?

Dark pools are an alternative trading system to the big exchanges — like the NYSE, for example. These systems provide certain investors with the ability to execute large trades without having to publicly disclose the transactions until execution is completed.

The main purpose of dark pools is to generate liquidity, primarily for the benefit of buy-side institutions, without much disruption to asset prices. Proponents might argue that the process reduces volatility for all. However, dark pools are also criticized for lack of transparency surrounding trade operations.

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Dark pools: impact on AMC

Due to its secrecy nature, the anonymous trading model is an easy target for speculation and skepticism. Many retail investors, as evidenced by the discontentment of apes with dark pools, believe that institutional players and high-frequency traders benefit from the lack of transparency.

Apes, in fact, think that dark pool activity impacts prices and contributes to downward pressure on AMC stock. On Twitter, the hashtag #SuspendDarkPools has been a trending topic and urges regulators to suspend dark pools for the sake of transparency and fairness to retail traders.

Wall Street Memes’ take

The case of AMC seems to go beyond merely making a buck – or earning “chicken tendies” – in the market. It symbolizes a battle between retail and institutional investors for what the former believes to be predatory practices that allegedly benefit the larger players.

It is hard to say with certainty whether dark pools are one of the reasons behind AMC stock’s struggles in recent weeks. Dark pools have been around for a considerable time, and not even they were able to prevent AMC (and other meme stocks) from rallying earlier this year on the back of short squeezes.

For now, AMC investors seem committed to holding the stock and even adding to their positions to keep the battle going, until the highly anticipated MOASS arrives.

Twitter speaks

AMC investors have had a rough July, down more than 30%. What do you expect of AMC shares in August?

(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting Wall Street Memes)