AMC and APE from a Securities Lending Perspective Part 1

DataLend provides best in class securities lending data, covering all asset classes, regions and markets globally. Here we analyze the recent performance of meme stocks AMC and APE as seen in DataLend.    

Meme stock, AMC Holdings Company, has made headlines once again as plans to raise capital have resulted in an upcoming vote to equally merge AMC common shares and AMC’s preferred shares, APE. As of January 26th, AMC common shares closed at $5.28 while APE preferred shares closed at $1.79 creating an arbitrage opportunity that has led to increased volatility in the lending market. 

Given the merger price would likely occur between the current share price of both issues, DataLend has observed drastic fee, or cost to borrow, movement in both the common and preferred shares. Since the December 22nd, 2022, announcement, the average fee for new borrows in AMC, already a hard to borrow security before the announcement, has increased by 219%. Across all open positions in AMC common shares, the average fee to borrow the security has risen by 435% since December 21st. The preferred shares, APE, observed a similar spike in the average fee of new borrows in the days immediately following December 22nd, increasing by 157% by December 26th. These fees have tapered off a bit from their peak but still sit firmly in the hard to borrow market.