Retail traders keep meme stocks short for third day in a row
These shorts are on fire. Again.
For a third consecutive day, actions in the GameStop GME mega-actions,
and AMC Entertainment AMC,
soared to massive gains on Wednesday as retail traders crammed into what is now another pressure on hedge funds and other institutional investors to sell stocks.
GameStop rose almost 16%, pushing it to price points not seen since early March, while AMC jumped almost 19%, bringing it down to almost $ 20 a share after rising around 95% in May, the highest since the short January. squeeze that introduced the world to the idea of meme stocks.
The two stocks largely outperformed the main DJIA indices,
which remained relatively flat throughout the day.
On social media, the ‘diamond hands’ discourse, intended to express an intense aversion to selling stocks, has morphed into a new iteration of ‘diamond fists’, summing up the more militant view of stocks. “HODLing” to keep pumping them in the face of hedge funds that new data shows are still short on both stocks, even after being crushed by January pressure.
“Short-term interest in GameStop is still remarkably high compared to the average company in the US stock market,” said Peter Hillerberg, co-founder and CTO of Ortex Analytics.
Short positions on GameStop and AMC remained at high levels after falling following the January squeeze, Hillerberg said, with more than 20% of GameStop’s entire float being bypassed at some point on Wednesday.
But after creeping back up over the course of a few weeks, the shorts started releasing this week as retail investors on social media platforms like Reddit used the scarcity of available stocks to push trade back in their favor.
“Again, it’s not the pressure. These are just resets of their FTDs, ”Damselindistress posted on the Reddit r / Superstonk board, referring to the theory that hedge funds failed to deliver their shorts the first time around. “This proves, once again, that their shorts have never been closed.”
And while GameStop and AMC have both used retail investor interest to fuel their growth by issuing new stocks to pay off large debts, the latest squeeze shows the line between retail sellers and short sellers is deeper. tense.
“There is often a causation with short interest and the price of the share,” Hillerberg thought to himself. “This week that causality has gone crazy.