Lucas Jackson / Reuters
- GameStop short sellers lost $ 3.3 billion against the stock in 2021, S3 Partners said.
- The losses amounted to about $ 1.6 billion on Friday alone, as the share rose 51%.
- GameStop soared as Reddit merchants increased strong momentum to extraordinary levels.
- Check out GameStop Trading here.
Investors betting against GameStop and the army of strong retailers have already lost billions by 2021.
According to data from financial analysis firm S3 Partners, the price loss for GameStop shorts reached $ 3.3 billion year-on-year when trading closed on Friday. Losses amounted to almost $ 1.6 billion on Friday alone, as shares rose 51% higher.
GameStop stock continued to rise as Reddit users and day traders extended their unusual momentum trading to the third week. The company’s shares initially jumped on January 11 after agreeing with an activist investor to add three new directors to its board. Profits of the day increased in retailers, including members of the popular WallStreetBets subreddit.
Online jobs urging other investors to enter the trade have since driven excessive momentum for GameStop. The stock traded 115% higher ET at 10:40 a.m. Monday and is higher than 500% year-on-year.
Read more: BANK OF AMERICA: Buy these 31 uncooled stocks as the hottest operations of the past few months in repairs continue to intensify.
Although some believe that the gains are fueled by a tremendous short pressure, the demand for the short-circuiting of the stock is still strong. According to S3, about 72 million shares – or 140% of GameStop’s fleet – were shortened according to the short term of Friday. In the last seven days, the number of short-term shares has risen by 883,000, although the share has soared.
“There was a queue of new short sellers who wanted to get short exposure to GameStop after the recent run-up,” Ihor Dusaniwsky, managing director of predictive analytics at S3, told Insider, adding that brokers did not meet the demand for shares for short. to sell.
Short sellers and Wall Street have struggled to make sense of the phenomenon of retailers. Only one firm, Telsey Advisory Group, has downgraded shares since they rose earlier this month. The Street’s average price target is $ 11.96, which implies a high expectation of a collapse of 81%.
Read more: This actively managed SPAC ETF amassed $ 60 million in assets within a month of launch. Its founder explains how to choose blank check businesses – and part 3 to see in 2021.
Andrew Left of Citron Research, one of Wall Street’s most outspoken GameStop panties, said on Friday he would not comment further on the stock. Left on Thursday posted a video criticizing critical traders, arguing that the stock would soon drop to $ 20. WallStreetBets members came up with Left with memes and derogatory remarks.
The short seller said on Friday that an ‘angry crowd’ of online retailers had harassed him and tried to hack his Twitter account, which led to him ending his comments on the stock.
The left has maintained its short thesis – but what began as a moderately short push has developed into a ‘vice-grip’ on those betting on GameStop, Dusaniwsky said. He added that the extended rally of the stock would force shorts to reconsider their confidence in their position and likely kill many GameStop cattle.
Now read more market coverage from Markets Insider and Business Insider:
Buy these 13 shares that benefit from a surge in the adoption of 5G smartphones, says UBS – including one that is expected to rise 69%
Microsoft will shoot up another 20% as cloud computing strength yields strong earnings, says Wedbush
US business activity increases as manufacturing meter hits record highs, says IHS Markit
Market Insider