LONDON (Reuters) – Investors shorting meme stocks GameStop and AMC Entertainment are estimated to have lost $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 8% to nearly $225 in U.S. premarket trading on Wednesday, a day after rising 18%. Shares in cinema operator AMC soared 39%.
“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 21% of freefloat and in GME it is estimated at 17% of freefloat, according to Refinitiv data.
Ortex data shows short-sellers lost $618 million during Tuesday’s session, rising to $754 million if aftermarket trading were taken into account.
(Reporting by Thyagaraju Adinarayan and Sujata Rao)