Retail investors have been the dominant Wall Street investor for nearly six months. Although retail investors have been investing in the stock market for more than 100 years, their impact on equity prices has never been as significant as in 2021.Reddit, Twitter and other social media platforms have encouraged retail investors to join forces and buy shares as well as out-of-the money call options for stocks with high short interest. These retail investors have two goals. They want to create a short squeeze, which is a short-term event in which short-sellers, i.e. pessimists betting against downside stocks, are driven to the exit. Second, short-sellers tend to be institutional investors so they are keen to stick it to the suits.AMC has gone bananas with "Apes".Although GameStop represented "Reddit trading" for months it has been overtaken by AMC Entertainment (NYSE :AMC), which has a greater year-to-date return.AMC shares are owned by a number of retail investors, who collectively are called "apes" and believe there is a significant short squeeze. AMC has seen the number shares that are held short rise over the last few months. Morningstar reported 85.08 million shares were held short as of June 15, 2021 relative to a closer to 449,000,000 shares.AMC's share price is being manipulated by Wall Street, which is what apes believe. You can find multiple discussion threads on AMC's stock dark pool trading, naked short-selling (i.e. shorting shares of stock which don't exist) and the notion that hedge funds (often referred to simply as "hedgies") are trying to bankrupt businesses through shorting them to the ground.AMC's retail investors view themselves as being on a mission against Wall Street manipulation.The problem is that manipulation is actually happening. But it isn't coming from Wall Street. It seems that AMC's retail investors may be the real source of price manipulation.Wall Street is manipulating AMC, but not Wall Street.The Securities Exchange Act, which was established in June 1934, covers secondary trading in stocks, bonds, debentures and other securities in the United States. This 367-page law governs what is legal and not in the investing industry. It also includes a section about market manipulation. Section 9(a), 9(a(2) state (page 85, for those who are interested):Directly or indirectly, it is against the law for anyone to effect, either alone or together with more than one person, a series or transactions in any security that has been registered on a national security exchange or in connection to any security-based Swap or security-based Swap agreement. This includes any activity in the security creating active trading or raising or lowering the price for such security in order to induce the purchase or sell of such security.This means that it is illegal to attempt to defraud investors by taking actions that artificially affect the price underlying securities. AMC investors will tell that they "like the stock" and that "buying or holding a company doesn't make it illegal." The law is also my agreement. AMC stock investors can purchase as many shares as they like and keep them on the market for as long or as little as they like.Their actions on social media seem to indicate that they are trying to influence supply and demand for AMC shares. Reddit traders use a mix of hype, deliberate ignorance of fundamental operating data and misinformation to artificially push AMC's share prices higher.You may be wondering how I can support these claims. You can search Reddit and Twitter for AMC posts. It won't take long to discover the bullying or misleading tactics used to coerce compliance with what appears to be a coordinated, bona fide pump-and-dump scheme.AMC is constantly hyped on social mediaAMC apes post ridiculous price targets daily to social media boards, in order to keep interest high. This is the most common tactic used to convince investors that there will be a short squeeze, even though it is unlikely.People will often try to get the hashtag "AMC100k", or "AMC500k", trending on Twitter. These people are trying to convince unsuspecting investors that AMC will go from $2 in January, to $100,000, or $500,000 per share. This is to give you some context. A $100,000 share would represent a market cap well above two-thirds of the U.S. annual gross domestic product (GDP), while a $500,000 price would equal almost three-quarters of the global GDP (more that $250 trillion). Apple, with a market capitalization of $2.2 trillion, is the largest publicly traded company in the world.Although these price targets sound innocent, they are a direct attempt at artificial support without any fundamental backing.Social media mob mentality stamps out efforts to present income statement/balance sheets dataRetail traders may also manipulate AMC's share prices by using social media strong arm tactics to block any discussion about the company's operating results or balance sheet. The reason is simple. Presenting income statements or balance sheet data on this company would totally destroy the buy thesis -- and manipulators know that.Reddit, Yahoo! and other message boards quickly downvoted any attempts to discuss the company’s operating performance and its $5.4 billion debt. They are also labeled "FUD" (fear-uncertainty, and doubt). New investors will only see the carefully constructed message that portrays AMC as a short-squeeze candidate with no obvious downside and tens to trillions in market capital of upside.This never-ending confirmation bias isn't enough to tell the whole story. Although AMC has secured enough capital to avoid bankruptcy in the short-term, its 2027 bonds are not priced at par. This suggests that bankruptcy is still possible, even though it may be years away. This is not FUD. This is a fact.In addition, the 19-year decline in ticket sales has been quite steady for the movie industry. Even though AMC is growing its market share, the industry continues to shrink. This will likely continue as streaming and film exclusivity work against AMC.The company is also not profitable, and it spent $324 million on cash in the first quarter.Investors should be aware of this important information. It's okay for them to still invest in AMC. However, deliberately suppressing and hiding tangible facts from unsuspecting investors in order to up-vote what is essentially hype-driven propaganda does not allow them to make informed investments decisions.This movement is based on misinformation and liesThe most obvious sign of manipulation is the way AMC apes spread false information to promote this pump-and dump scheme. Here are some examples that you will see often, and why they are false.False. "Apes saved AMC" AMC saved its own bacon by issuing high-interest debt and shares worth hundreds of millions earlier in the year. Camaraderie is essential to keep other retail investors in line. This is why this falsehood has lasted so long. It is clear that AMC's operational performance and only its operating performance will decide whether or not it can be saved."False. AMC was able to save itself by issuing high-interest debt and shares worth hundreds of millions earlier in the year. Camaraderie is essential to keep other retail investors in line. This is why this falsehood has lasted so long. AMC's operational performance and only its operating performance will decide whether or not it is saved. Hedge fund shorting can bankrupt companies: False. Buyers and short-sellers are simply people hoping for different outcomes. The business's operating performance ultimately determines the outcome. No matter how many institutional investors are short of shares, they cannot drive a company to bankruptcy. Anybody who tells you otherwise is lying.False. Buyers and short-sellers are simply people hoping for different outcomes. The business's operating performance ultimately determines the outcome. No matter how many institutional investors are short of shares, they cannot drive a company to bankruptcy. Anybody who tells you otherwise is lying. Hedge funds control MSM: False. Retail investors at AMC want you to believe every institutional investor is evil, and that it's a constant David against Goliath fight. Hedge funds are not the only ones who control mainstream media (MSM). This misinformation is perpetuated by retail investors to keep less-informed investors in line."False. AMC's retail investors want to make you believe that every institutional investor in the world is evil, and that it's a constant David against Goliath struggle. Hedge funds are not the only ones who control mainstream media (MSM). Retail investors spread misinformation to keep investors less informed in line. False: Hedge funds line their pockets Apes often claim that any journalist or analyst, writer, TV personality, etc., who doesn’t see eye-to–eye with them, is being paid by hedge funds. This is another defense mechanism to maintain the "us-vs.-them" mentality necessary to keep this pump and dump scheme alive.False. Apes often claim that journalists, analysts, writers, TV personalities, etc., who don't see eye-to–eye with them, are being paid off or have connections to hedge funds. This is another defense mechanism to maintain the "us-vs.-them" mentality necessary to keep this pump and dump scheme alive. False: "Fundamentals don’t matter:" Always, the operating performance and balance sheets of a company matter. If you doubt that they matter, talk to Washington Prime Group shareholders. They saw half of their investment disappear overnight after the company filed Chapter 11 bankruptcy protection. Reddit traders had been praising Washington Prime for its potential short-term squeeze, just hours before the bankruptcy filing.AMC retail investors are, in my view, hypocrites. They promote transparency and rail against Wall Street manipulation unsubstantiated, but they purposely block the full story via message boards and spread misinformation to manipulate AMC's price.Retail investors can artificially inflate AMC's share prices for as long as they like. I don't know how long. But I do know that every pump-and dump scheme has ended in failure. AMC is no exception.
