Why AMV could be the next HKD

It was a crazy day for Atlis Motor Vehicles Inc (AMV). The stock opened up nearly 200% at $243.99 but closed at $75.15, down 8.5% on the day. It was another one of these small float IPO runners as the company did a $50 million Reg A raise of 1.85 million shares at $27.50. 

Everyone is expecting the stock to collapse, however there is one stark difference between AMV and the other recent small float IPOs, which can be summarized in this chart below. It shows the price and volume of HKD, AXTG, MEGL, SHPH and AMV on their second and third day of listing, respectively.








The thing that immediately stands out on AMV is its volume, or lack of it. 1.85 million shares are in the offering and only 230,000 of them traded today. The LESS volume one of these types of stocks have, the BETTER the chance that it has of going through the roof. By the third day of trading, AXTG and MEGL got pounded into submission with millions of shares traded. HKD traded just three million shares in these two days, and formed a base for what eventually caused its liftoff to over $2,000 per share. 

There are a bunch of early AMV investors looking to sell or at least receive their shares. These investors are almost all retail investors and don't know the quickest and most efficient ways of selling their shares. AST, AMV's stock transfer service, is supposedly going to enable retail shareholders to start selling shares over the next couple of days,  but other brokers will take 1-2 weeks for investors to receive their shares. 

Whenever day traders get screwed into a bagholding position, they blame Wall Street hedge funds and market makers  for manipulating the stock and dumping it on them. AMV has no such issue. It's all retail owned while the 1.85 million offering is the only piece in the hands of Wall Street. This is a day traders dream. Access to a stock with little to no MM manipulation. It's on even keel with all other retail traders. 

Until these retail shareholders are able to sell, the stock has an opportunity to blow through the roof as it is enormously easy to push the stock price up on almost no volume. Similar to HKD. When HKD was trading above $500, it has daily volume in the 100,000 to 500,000 range. 

On the second day of the IPO, AMV traded one-quarter of the volume HKD did on its second day of trading. If volume remains minuscule tomorrow, expect AMV to blow through the roof. 

This stock is a lottery ticket and people should treat it as such. However, all it takes is about 20,000 retail shareholders buying 100 shares each and that's the entire float. We don't think there will be any shorts available, but if there is, almost certainly that short interest will be maximized. The stock has a market cap in the $5 to $10 billion range right now. Back in 2020 when NKLA first listed, it spent weeks in the $20 to $30 billion market cap range. AMV with its concept EV truck is in a very similar position to what NKLA was back then. Shorts and bears and naysayers can easily get squeezed thinking that this stock will be headed for an imminent collapse. Meanwhile, the market has a clear history of valuing a stock like AMV very aggressively, even if only for a short time. 

When were the naysayers loudest on HKD? When it was first breaking out above $500. By the time it surpassed $2,000 and became one of the top ten largest companies listed in the U.S., those bears were in awe and just shaking their heads. Yes it's down under $100 now. But we aren't worried about what can happen on AMV a month from now. We are wondering what can happen in the next 1-5 trading days. 

Comments

Post a Comment

Popular posts from this blog

The Two Best Biotech Short Squeeze Candidates And The Next Carvana

Image
With the market having recovered most of its recent drop to be near all-time highs once again, shorts have been destroyed and are in a desperate spot. Heavily shorted stocks like B. Riley Financial, Inc. (RILY), Globe Life Inc. (GL) and Carvana Co. (CVNA) have been on absolute tears. We have written about CVNA before , as well as the impact of CVNA's move on Root , Inc. (ROOT). When a stock is squeezing like CVNA, a related stock like ROOT will follow suit. Shorts are often shorting multiple related stocks. Most don't even hide it with Kerrisdale openly bragging about its poor track record. GL was another one that was attacked by shorts which we talked about as a gamma squeeze candidate that has worked out very well over the past three weeks.  In this market of short squeezes, we have identified two excellent biotech short squeeze candidates, ImmunityBio, Inc. (IBRX) and Soleno Therapeutics, Inc. (SLNO). IBRX is starting up the production and sale of its cancer drug ANKT...
Read more

The Next NVDA-Backed Runner and New Asian IPO Squeeze Play

Image
We have seen stocks like Super Micro Computer, Inc. (SMCI) and SoundHound AI, Inc. (SOUN) have incredible squeeze runs thanks to their connection to NVIDIA Corporation (NVDA). We think the next one will be Spire Global, Inc. (SPIR), which popped a week ago after it announced a collaboration with NVDA to enhance AI-driven weather prediction. A few day later it dropped on the announcement of a financing at $14, with the potential to raise $61 million if warrants at $14.50 are exercised. We think there is a good chance that NVDA got in on this financing, as it tends to invest in the companies it does these deals with when spreading AI across different sectors. One such recent example was with Recursion Pharmaceuticals, Inc. (RXRX) for AI in drug development.  It looks like SPIR didn't really need this financing as it has enough cash and looks like it will be cash flow and net income positive in 2024. This financing was of a strategic nature, not something led by broker...
Read more

Forget about CVNA, PLCE is the Next Major Short Squeeze Play

Image
 Back in June, we called out Kerrisdale Capital and its short on Carvana Co. (CVNA) in our piece " Carvana: The Gamma Squeeze is Real, Time to Bankrupt Kerrisdale ". Kerrisdale has a history of calling one bad short after another, creating a squeeze on all of its positions as the firm and its associates face liquidity crises. Kerrisdale is once again on a cold streak as its short on Altimmune, Inc. (ALT) simultaneously blew up just as CVNA headed from $70 to $80 this week.  However, we think CVNA is done for now. Recall that in June after the initial spike to nearly $30, the stock pulled back to $20 before hitting $40 in the next month. People who are riding weekly call options aren't likely to cash in. CVNA looks headed to the mid to low $60's to close the gap that currently exists in the $62 to $66 area before resuming any further rise. Kerrisdale created an artificial short squeeze with its report, but now that both ALT and CVNA have come down from their weekly hig...
Read more