LONDON: Investors shorting meme stocks GameStop and AMC Entertainment are estimated to have lost US$754 million on Tuesday alone as the shares rallied, data from financial analytics firm Ortex shows.
Shares in GameStop, which was at the heart of the so-called “stonks” retail trading mania earlier this year, rose 8per cent to nearly US$225 in U.S. premarket trading on Wednesday, a day after rising 18per cent. Shares in cinema operator AMC soared 39per cent.
“The sharp price increase can cause short position holders to try to close their positions by buying back the shares, causing additional demand which in turn can cause the share price to go up further,” said Peter Hillerberg, co-founder of Ortex.
“This is what the ‘Reddit army’ is hoping for.”
Short interest in AMC is currently estimated to be 21per cent of freefloat and in GME it is estimated at 17per cent of freefloat, according to Refinitiv data.
Ortex data shows short-sellers lost US$618 million during Tuesday’s session, rising to US$754 million if aftermarket trading were taken into account.
(Reporting by Thyagaraju Adinarayan and Sujata Rao)
