Investors betting against GameStop Corp. and AMC Entertainment Holdings Inc. have lost more than $8 billion in the year-to-date period following the latest rally in the “meme” stocks, according to areportby Reuters that cited data from financial analytics firm S3 Partners.
What Happened:Short sellers - those betting for declines in the company’s shares - have recorded$6.7 billion in year-to-date losses after video game retailer GameStop’s stock surged on Wednesday, according to the report.
Similarly, the rally in movie theatre chain AMC Entertainment’s shares until Wednesday has resulted in year-to-date losses of $1.37 billion for short sellers, the report noted.
About 20.3% of GameStop shares and about 20.6% of AMC shares are currently sold short, the report quoted Ihor Dusaniwsky, managing director of predictive analytics at S3, as saying.
Dusaniwsky added that some short covering was seen in GameStop as mark-to-market losses mount on the short side.
Why It Matters: Meme stocks such as GameStop and AMC Entertainmentthat were the focus of retail investors on Reddit’s r/WallStreetBets forum earlier this year are riding another wave higher as the Reddit traders attempt to squeeze the stocks higher.
GameStop’s stock has risen 37% and AMC has gained more than 60% this week. The stock’s year-to-date returns stand at 1,187.47%, while AMC Entertainment’s stock has returned year-to-date gains of 822.64%.
Price Action:GameStop shares closed 15.8% higher in Wednesday’s regular trading session at $242.56, while AMC Entertainment shares closed 19.2% higher in the regular trading session at $19.56.
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