Short-seller says AMC’s fundamentals are obvious and that the meteoric run in the theater operator’s stock is nearing an end

• Short-seller Iceberg Research revealed a short position on AMC Friday.
• Iceberg told Insider that AMC’s current stock price, hovering around $50, has been unsustainably inflated.
• Iceberg made headlines for knocking 99% off the share price of a commodity trader once worth nearly $12 billion.
• See more stories on Insider’s business page.

Iceberg Research revealed a short position on AMC on Friday, staking out a claim against one of the buzziest retail stocks to date.

Arnaud Vagner, the main short-seller behind Iceberg, told Insider that AMC’s current stock price, hovering around $50, has been unsustainably inflated by call options activity in the already-tough theater business.

“The volatility of the meme stocks is largely driven by call options, and their ‘gamma squeeze effect,'” Vagner said – referring to a situation where a stock’s sharp price increase forces market makers to buy more shares, accelerating the stock’s ascent.

“However, this effect is temporary and the correction is inevitable. The volume of call options has substantially declined,” he added.

In a series of tweets announcing the short, Iceberg described the AMC “pump” as “increasingly shaky,” calling the weaker fundamentals of AMC “obvious.”

“We don’t accuse the company of fraud. There is a price for everything and we believe the pump has exceeded its average life,” Iceberg tweeted.

In previous years, Vagner’s Iceberg made headlines for knocking some 99% off the share price of Noble Group, a big commodity trader once worth nearly $12 billion, after Iceberg alleged massive accounting fraud.

More recently, the short-seller released a report in April on Diginex, a crypto exchange that went public via SPAC, alleging corporate governance “red flags” and noting the founder had sold 96% of his shares. Since the report, Diginex shares have fallen 23%.

AMC stock has undergone a disorienting run-up in recent months. After spending 2020 in the single digits, it has skyrocketed to as high as $72.62 in early June. AMC was trading at $49.40 as of 12:45 p.m. ET.