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AMC insider selling picks up as meme stock rises amid retail wave

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A sign hangs in front of an AMC theater on January 27, 2021 in Chicago, Illinois. Shares of AMC Entertainment more than quadrupled today as investors continue their buying spree on heavily shorted stocks.

Scott Olson | Getty Images

Insider-selling activity at AMC Entertainment ramped up like never before during the recent explosive rally driven by enthusiastic retail investors.

A total of seven insiders at the movie theater chain sold a portion of their stake since May 28 when the latest leg-up began, selling in a wide price range of $27.42 to $62.67, according to InsiderScore’s analysis of regulatory filings. The stock price has more than doubled since that day, last trading at $57.70 apiece.

Six of them disclosed their sales on Friday after the market close, and one revealed at the end of May, according to InsiderScore.

“Clearly, AMC insiders don’t want to miss out on the opportunity to cash in some stock-based compensation at valuations that few people could have imagined just months ago,” said Ben Silverman, director of research at InsiderScore.

A total of nine insiders have sold this quarter, and three cashed out in the first quarter, according to InsiderScore. That compares to no sellers in all of 2020 and just three from 2017 to 2019, InsiderScore said.

Notably, CEO Adam Aron, who joined the company at the start of 2016, has never sold his AMC shares.

AMC has gained more than 120% in June alone after a 160% advance in May, pushing its 2021 rally to over 2,600%. The stock has far surpassed its January high amid the GameStop trading mania, hitting an intraday record of $72.62 last week.

Insiders are required to file their transactions in a company’s common stock as well as derivative securities with the Securities and Exchange Commission within two business days following the transaction date.

Amid the massive rally last week, AMC managed to quickly sell 20 million shares in two separate deals and generated around $800 million in cash. 

“Between those two transactions we raised over $800 million of cash, not to line my pocket or anybody who works at AMC, but to put that money in the treasury of AMC to strengthen AMC and let AMC do more good things, to grow the company,” Aron said in a YouTube video last week.

Aron has signaled he wants to sell up to 25 million more shares as the company is near the limit of the number of shares outstanding its charter allows. From January to May, AMC raked in about $1.6 billion in cash from stock sales.

The company has around 501 million shares outstanding and about 46,000 shares left for future issuance.

— CNBC’s Sarah Whitten contributed to this story.

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Air conditioning and climate change: Start-ups trying to help

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This June was the hottest in American history. The 116-degree heat melted power cables in Portland, Oregon, and smashed previous temperature records. Seattle recorded an all-time high of 108 degrees, as did the Canadian province of British Columbia, at a whopping 121 degrees.

As the world warms, more people are installing air conditioning. Global energy demand for cooling has more than tripled since 1990 and could more than double between now and 2040 without stricter efficiency standards.

But air conditioning itself is a major contributor to global warming. Altogether, building operations that include heating, cooling and lighting account for 28% of the world’s total greenhouse gas emissions. That’s more than the entire global transportation sector.

But SkyCool, Gradient and a number of other companies are working on the problem. They’re trying to apply new technologies to the traditionally inflexible heating and cooling industry, finance the upfront costs, communicate the value to property owners and make sure it’s all done equitably. 

Watch the video to learn more.

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The U.S. is deciding how to respond to China’s digital yuan

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China is beating the U.S. when it comes to innovation in online money, posing challenges to the U.S. dollar’s status as the de facto monetary reserve. Nearly 80 countries — including China and the U.S. — are in the process of developing a CBDC, or Central Bank Digital Currency. It’s a form of money that’s regulated but exists entirely online. China has already launched its digital yuan to more than a million Chinese citizens, while the U.S. is still largely focused on research.

The two groups tasked with this research in the U.S., MIT’s Digital Currency Initiative and the Federal Reserve Bank of Boston, are parsing out what a digital currency might look like for Americans. Privacy is a major concern, so researchers and analysts are observing China’s digital yuan rollout.

“I think that if there is a digital dollar, privacy is going to be a very, very important part of that,” said Neha Narula, director of the Digital Currency Initiative at the MIT Media Lab. “The United States is pretty different than China.”

Another concern is access. According to the Pew Research Center, 7% of Americans say they don’t use the internet. For Black Americans, that rises to 9%, and for Americans over the age of 65, that rises to 25%. Americans with a disability are about three times as likely as those without a disability to say they never go online. That is part of what MIT is researching.

“Most of the work that we’re doing assumes that CBDC will coexist with physical cash and that users will still be able to use physical cash if they want to,” Narula said.

The idea of a CBDC in the U.S. is aimed, in part, at making sure the dollar stays the monetary leader in the world economy.

“The United States should not rest on its current leadership in this area. It should push ahead and develop a clear strategy for how to remain very strong and take advantage of the strength of the dollar,” said Darrell Duffie, professor of finance at Stanford University’s Graduate School of Business.

Others see the digital yuan as insidious.

“The digital yuan is the largest threat to the West that we’ve faced in the last 30, 40 years. It allows China to get their claws into everyone in the West and allows them to export their digital authoritarianism,” said Kyle Bass of Hayman Capital Management.

Watch CNBC’s deep dive video into CDBCs to learn more.

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Warren Buffett’s advice from 1999 on how he’d invest $10,000

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If you want to be as rich as Warren Buffett, don’t wait to get started. That’s the advice that the investing titan shared in 1999 at Berkshire Hathaway’s annual shareholders meeting when asked how to make $30 billion, which was roughly his net worth at the time.

The then-68-year-old Buffett — whose fortune has since grown to more than $100 billion — said that compound interest is an investor’s best friend and compared building wealth through interest to rolling a snowball down a hill.

“Start early,” Buffett said. “I started building this little snowball at the top of a very long hill. The trick to have a very long hill is either starting very young or living to be very old.”

The Oracle of Omaha said that if he were graduating from college in 1999 and had $10,000 to invest, he would be strategic about choosing where to put his money. “I probably would focus on smaller companies because I would be working with smaller sums and there’s more chance that something is overlooked in that arena,” Buffett explained, saying he would start examining companies alphabetically and work his way from there.

Investors, Buffett explained, need to fend for themselves and rely on their own knowledge and intuition when searching for promising businesses to invest in. He added that savvy investors would do best to “learn what you know and what you don’t” and act “very vigorously” when they see something they consider to be a good opportunity.

“You can’t look around for people to agree with you,” Buffett said of putting money into an investment. “You can’t look around for people to even know what you’re talking about.”

That said, Buffett is also a staunch supporter of index funds, which hold every stock in an index, making them automatically diversified. To build wealth, investors should “consistently buy an S&P 500 low-cost index fund,” Buffett said in 2017. “Keep buying it through thick and thin, and especially through thin.”

Still, Buffett said that aspiring to make $30 billion is unnecessary, and recently said that the size of his fortune is “incomprehensible.”

“The money makes very little difference after a moderate level,” he said.

He continued: “If you asked me to trade away a very significant percentage of my net worth either for some extra years on my life or being able to do during those years what I want to do, I’d do it in a second.”

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Don’t miss: Here’s why Warren Buffett isn’t leaving his $100 billion fortune to his kids

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