It has to rebound else abyssal await
If stock price plunge further say below $5, its a free fall to abyss.
1. Some Fund House have rules that they cannot hold share in company that is less than $5, below a certain market cap, high volatility nature, and this will force them to offload adding pressure to spiral downward.
2. If it's too low, USA exchange will send a warning to the company to pop their share price above a certain level for a period of time. Failure to comply will move them to OTC.
3. Should they reverse split to push up the price, for breathing space, to short seller, they might see more headroom to short further.
1. Some Fund House have rules that they cannot hold share in company that is less than $5, below a certain market cap, high volatility nature, and this will force them to offload adding pressure to spiral downward.
2. If it's too low, USA exchange will send a warning to the company to pop their share price above a certain level for a period of time. Failure to comply will move them to OTC.
3. Should they reverse split to push up the price, for breathing space, to short seller, they might see more headroom to short further.
Maybe we can have input from some member here why Citi bank or GE reverse split?
The best course of action is to go private should price reach record low while accumulate share to become the latest shareholder to exercise this strategy.
But should price rebound strongly, perhaps we can sit back and take a breather and hopefully more positive news to back the surge.
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doctorpot1 : hmm their share price was below 5 from 2019 to 2020. even goes as low as $2. so I'm not convinced about your analysis
AMC1000K : iirc nasdaq has a requirement of maintaining the stock price above 1USD, anything below might have a risk of de-listing, but this is not an issue as the market cap is still 1b currently, even if it tanks 20-30%, we still have a decent market cap.
If the price of the stock do drop till abysmal level, they can easily just do a reverse share split to resolve this issue, heck they might even do a share buyback to alleviate short term downsides.
Best scenario is they declare a dividend payout by the end of this year, this will make shorts having to either cover or else they'll have to pay for the dividene per share.
102169479 OP AMC1000K : What you analyse is pretty similar to mine. The thing is will it be too tempting for the management to buy back the share and take it private since its so cheap. Reverse split is mention in my post as an option to wriggle some room to breath. But will it attract short seller to short again since there is plenty of headroom to go down?
102169479 OP doctorpot1 : At that time, they just ipo not too long so they couldn't take it private so soon. Lately they did raise some money through bonds or convertible bond to shore up their cash position. If they do not want to touch the cash, they could easily find other venture capital or xiaomi which is tiger backer to jointly take it private and probably list in Hk and China exchange closer to home or appeal to the China government
AMC1000K 102169479 OP : Yes, no doubt the shorting will still continue unless we get a good public relations from the company like actually getting licensed to continue operations in China.
This company is still way undervalued and only the only way we can start seeing double digits is if they find a way to rid the constant pressure from China. Heck we might even see a short squeeze once that's cleared up.
doctorpot1 102169479 OP : Yes I also noticed they are getting their users to park cash with them too through a tiger cash plus program. I was wondering why are they trying to increase their cash by so much.
Looking at their financial statement half of their current asset is just cash locked up for regulation purposes so I assumed they are trying to pull in more cash as they are expanding really quickly and they are getting more popular. So they need tons of cash to avoid a robinhood incident.
Hope they are not increasing cash to pay fines hahahahhaa
102169479 OP AMC1000K : Yes. Stock like these has tremendous steep upshot when short are squeeze once any good news surface. That will cause the short seller to scramble and stampede in the process to close their position.