Those Still Shorting Gamestop, AMC Are 'Out Of Their Mind,' Says Cramer

CNBC host Jim Cramer has taken a swipe at investors trying to short “meme” stocks GameStop Corp GME and AMC Entertainment Holdings Inc. AMC, saying that they are “out of their mind.”

What Happened: The “Mad Money” host made the comments after shares of video game retailer GameStop rose almost 16% and movie theatre chain AMC Entertainment gained more than 19% in Wednesday’s trading session.

“Anyone shorting AMC or GameStop is out of their mind. ... WallStreetBets is too powerful, and trying to bet against them right now is just giving them more ammo,” Cramer said.

See also: How‌ ‌to‌ ‌Buy‌ ‌GameStop‌ ‌(GME)‌ ‌Stock‌

Cramer believes both stocks are overvalued at current levels and are not trading based on their fundamentals. This makes shorting them dangerous as they remain favorites of the Reddit traders, he explained.

Why It Matters: The “meme” stocks that 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 and AMC Entertainment are currently trending across popular social media platforms.

See Also: Gamestop, AMC Latest Stock Surge Costs $930M Loss For Short Sellers In A Week

GameStop’s stock has risen 37% and AMC has gained more than 60% this week. GameStop 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%.

Data from analytics firm Ortex has shown that short sellers — those betting for declines in the company’s shares — lost $618 million after shares of the two companies rallied on Tuesday.

Price Action: GameStop shares closed 15.8% higher in Wednesday’s regular trading session at $242.56 and further edged up less than 0.1% in the after-hours session to $242.59.

AMC Entertainment shares closed 19.2% higher in the regular trading session at $19.56 and further rose 0.5% in the after-hours session to $19.66.

Read Next: GameStop Is Building NFT Platform Over Ethereum: What You Need To Know

Photo by Mike Mozart on Flickr