The naked proof: AMC and GME shares have been diluted by billions

AMC and GME shares have been illegally diluted by the billions NOT by their respective companies but by predatory practices of some market makers and brokers taking advantage of option markets, loopholes, T+∞ and an inattentive, ineffective and complicit SEC. Here are some more evidences in support of a well- known thesis on the Main Street that synthetic shares exist and they exist by the billions.

Central Argument

Based on now available data, some relatively small PFOF brokers (the largest being Webull) have sold to retail investors more AMC and GME synthetic shares than the entire outstanding shares at points and currently house unbelievably significant number of retail shares (disproportional to their size compared to other major brokers and clearing houses) which is an undeniable indicator of ongoing market malpractice, illegal dilution and shorting by market makers and brokers.

The data

The data utilized here is based on a WEB API data source through Apex clearing house which some PFOF brokers use. These brokers include Webull, Ally invest, Twine, Wealthsimple and M1 finance (for a list of APEX clients click here). The data and its presentation are very simple and straightforward. One does not need any data analysis skills to understand it and with a simple calculation it becomes apparent that the system is heavily rigged against the retail investors and nobody is doing anything about it.

To learn more about the WEB API that we have utilized and to learn how to download the data for yourself follow this link.

A simpler form of the data can be accessed here as an excel file.

How to interpret the data?

The best way to present the data is to look at one single day and also look at a range such as the entire year from 2020 to 2021 to comparatively understand the data and its implications.

Looking at one single day (Case study date 12/16/2021) the data shows there were 128,441,952 shares of AMC sold to retail investors on Apex brokers. This represents 24.99% of the shares outstanding and 43.01% of the retail float. These numbers are incredibly huge. If you sort the excel file provided and filter by big-cap and mega-cap you will see AMC stands as the #1 on top of the list of most held securities with 24.99% of the shares outstanding being housed on Apex brokers. The second on the list is Avis Car (Ticker CAR) with 16% which had experienced a short squeeze a few days prior and the third is ticker DOCU with 12%. The rest of the securities in that category were single digit or below. It becomes more clear to compare AMC to retail favorite blue-chip companies and mega-caps such as AMZN, GOOGL, GOOG, MSFT, AAPL, CRM, COST, FB, ASML, PYPL, CVX etc. to see the disparity and unusual numbers. You will be surprised to know APEX brokers only hold 1% or less of the outstanding shares of all the above tickers. Unbelievable!? Yes. But there is more.

Given the Brokerage-Exodus and the big number of American AND international brokers, one can only speculate how many synthetic shares there are on the market in the hand of retail. There does not seem to be another explanation for these numbers. In a separate study based on the Log The Float data it appears that the secret of synthetic shares may very well lie beyond the borders of USA. But let us focus on the US market and brokers for now because things are getting interesting.

AMC shares on Apex clearing house should be in the 1%-3% range and not more. However, the 24.99% recorded on a random day in December of 2021 happened to be one of the lowest points in 2021. If you review the chart below you will notice how shares of AMC and GME have been diluted "fair and square" and surprisingly no one has been convicted of financial treason for stealing the wealth of hard-working Americans.

And the graph below shows the number of AMC shares on APEX as a percentage of outstanding shares!

So retail investors owned more that 160% of the outstanding shares only on Webull et al. in January 2021 and more than 100% in May 2021!

Remember, Apex clearing does NOT include Robinhood, Fidelity, Merrill Lynch, Schwab, Pershing LLC, Goldman Sachs, J.P. Morgan etc. This is outrageous. 

Comparing the size of Apex clearing to other major clearing firms such as Fidelity, Schwab, Merrill Lynch, Pershing LLC, Goldman Sachs, J.P. Morgan Clearing Corp. you can only make one conclusion and that is: synthetic shares EXIST in unimaginable quantities thanks to infinity loops and have no doubt these brokers have a finger in the pie. The market maker-broker alliance is based on a tacit agreement and became a possibility because of extended settlement dates and opportunist PFOF brokers and their allies. Thus, what is known as the infinity loops and t+# is working perfectly to transfer wealth away from retail investors. The reality is that shares of retail favorite companies are diluted by the billions on the hope that these IOUs (synthetic shares) will become penny IOUs and perhaps worthless at some point in time. That "some point in time" is the key here. Charles Gradante, Co-Founder, Hennessee Group LLC, a Hedge Fund manager himself, in 2021 Palm Beach CorpGov Forum addressed the egregious prevalence of "naked short" positions taken by major market makers and that he believes they should result in more severe punishment. Additionally, he voiced support for retail investors who forced a short squeeze because the hedge funds went crazy over lax regulations on naked shorting:

There is no doubt that SEC is complicit and should be held accountable for allowing illegal naked shorting by market makers and seemingly legal infinity loops and creation of IOUs way beyond the required marker makers needs to supposedly maintain an "orderly" market. The fact that SEC does not do anything about it makes them culpable. Watch the following video if you need to learn more about this practice:

Let us now take a look at GME using the same dataset

Looking at the same single day data (Case study date 12/16/2021) it shows there were 4,000,087 shares of GME sold to retail investors on Apex brokers. This represents 5.23% of the shares outstanding and 12.40% of the retail float. These numbers are incredibly large.

And the chart below shows the number of GME shares on APEX as a percentage of outstanding shares!

The graph above shows retail investors owned more that 180% of the outstanding shares only on small PFOF brokers in January 2021 and continued to remain above 100% for a few months.

This level of irregularity is a catastrophe for any financial system to say the least. 

The supply and demand is the most basic rule of economics and by any standards if the supply and demand is artificially manipulated and manufactured (particularly to this extend in the stock market) then certainly criminal economic activities are occurring on a daily basis and someone or some institutions should be held responsible.

In a video call with Benzinga, WeBull CEO addressed the arbitrary nature of brokers settlement decision with the clearing firms with no repercussions what so ever. It seems the brokers have a choice to remove the buy button at will as they did in January 2021 with AMC and GME. Here you can watch that video:

But what if all or a lot of AMC retail investors use WeBull to make those numbers justifiable? Nope. That is not certainly the case. According to randomized selection of 8000 retail investors screenshots of their AMC positions only ~7.2 percent of investors amounting to ~4.8% of all submitted shares (~15 million verified shares) were from Webull. The details of this study will be published on LogTheFloat research and data section shortly. So, in reality, Webull having about ~ 25% of shares outstanding on December 16th, 2021 is a blatant mockery of our financial system. Enough is enough!


According to the data and analysis provided above the naked proof of naked shorting of AMC and GME is widely available. The naked shorting through creation of synthetic shares, married puts (naked puts to offset the calls/longs) and abuse of settlement dates or infinity loops (T+Infinity) have occurred and are ongoing. The department of Justice investigation is yet another indication of a need to deal with such activity but retail investors may not see any financial benefit to such bureaucratic procedures that could take months. To a retail investor, there is no sheriff in town and the punishments for such blatant criminal activities is just easily absorbed by hedge funds and market makers and perhaps it is considered a minor business cost or spillage by them. These minor fines are starting to look like a cut of the share of robbery from retail for maintaining the status quo. 

Special thanks to AcunTex for his cooperation, data management and the graphs.

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