GameStop (GME) has risen nearly 80% in the past week after news that board member and investor Ryan Cohen would play a key role in the company’s e-commerce strategy.
The Bulls expect Cohen, the retailer Chewy, who launched the pet products, to help the business realize potential GameStop fans as it transforms from a brick-and-mortar-oriented business to something more modern.
The GameStop bulls, which the company considers an underrated, long-term value game, may not pay as much attention to the movements of the stock, but it’s hard to miss the roller coaster ride. When the stock rose on Wednesday, short-term interest rates continued to fall, perhaps after short-sellers learned their lesson in the late January knockout and lost billions.
But according to Ihor Dusaniwsky of analytics firm S3 Partners, the short press will continue.
“We need to see the GME short pressure continue and a short short cover in the stock as the loss to market increases,” he told Yahoo Finance late on Wednesday. “But as the stock continues its rapid climb, short sellers will be waiting in the wings to gain entry points if this rally loses steam and GME’s share price repeats.”
Short-term interest rates may have fallen, but they are still significant: $ 2.76 billion with 11.18 million shares shorted, 20.52% short-term float or 17.02%, depending on how you calculate it, according to Dusaniwsky. (S3 prefers the latter, as it does not count the synthetic desire of a short sale. If it is confusing, S3 has a good explanation here.)
To put this in context, the co-stock AMC Entertainment has a short interest rate of 17.32%. Tesla, another well-known company, has 5.98% and Amazon 1.03%.
“It was not a profitable trading week for GME short sellers, after it was lower – $ 1.36 billion on Monday and Tuesday,” Dusaniwsky said. ‘[Wednesday’s] The 7% price shift added another amount – $ 202 million in additional loss of market-to-market price.
So the GameStop shorts have now lost $ 6.8 billion annually, Dusaniwsky said.
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Ethan Wolff-Mann is a Yahoo Finance author focusing on consumer issues, personal finance, retail, airlines, and more. Follow him on Twitter @ewolffmann.