Insider trading? Suspicious institution options trading in AMC raises concerns

Option trades worth millions made with insider information of AMC SEC filing?

On Monday, AMC announced it won’t be holding a shareholder vote on issuing 25 million new shares until next year.  However, it looks like several large option purchases were completed on Friday with prior knowledge of this. Benzinga reported in an article named “AMC Options Traders Aren’t Discouraged, Repeatedly Hammer Calls” that large institutions bought large chunks of call options Friday morning when the stock dipped. One cannot but question that initiators of these purchases knew that AMC would be issuing SEC filing regarding the fact that it wont sell anymore shares this year, knowing that such an announcement will raise the stock price.

Details of AMC SEC filing – no vote on new shares until next year

In a filing with the Securities and Exchange Commission, the company said it wouldn’t put the issuance of the additional Class A shares to a shareholder vote. Chief Executive Adam Aron also tweeted that the company didn’t want to split shareholders with the vote, which was supposed to happen this month. “It’s no secret I think shareholders should authorize 25 million more AMC shares,” Mr. Aron said in a tweet, adding that many shareholders were for and many were against. “AMC does not want to proceed with such a split.” He added in a second tweet that there won’t be any voting on more shares before next year. Shares of AMC rose 3.1% in premarket trading on the news to $53.55 a share. Shares of the company had fallen early last month on the news that AMC was going to sell more stock and the company saying that buyers of its stock could be out their money. AMC stock was up over 5% on Monday, before dropping lower. We can assume that most of the options trades were sold in the early morning.