The return of Keith Gill, aka Roaring Kitty, to social media has prompted increased interest in AMC Entertainment Holdings AMC and GameStop Corporation GME, which are often labeled as meme stocks.
The increased interest may have also led to more attention from short sellers. A short selling data expert breaks down the latest.
What Happened: In 2021, meme stocks became the center of a story that saw retail investors take on short sellers and hedge funds. A similar story played out recently and could continue in 2024 with investors betting against short sellers in several names.
S3 Partners Managing Director of Predictive Analytics Ihor Dusaniwsky shared an update on the short interest in GameStop and AMC recently.
Dusaniwsky said short interest in GameStop is $1.12 billion, with 39.4 million shares shorted.
"We've seen squeeze related short covering recently with 31.0 million shares, worth $930 million, bought-to-cover over the last 30 days," Dusaniwsky said.
The expert said there was a 45% decrease in the total shares shorted over the last 30 days, and short interest now stands at 12.5%.
Dusaniwsky said shorts are down $344 million in June and down $834 million year-to-date in 2024.
For AMC, Dusaniwsky said short interest is $325.8 million in the stock, with 62.66 million shares shorted.
"We've seen increased short selling recently with 6.2 million shares, worth $32 million, sold short over the last 30 days, a +11% increase in total shares shorted."
Dusaniwsky said AMC short sellers are down $36 million in June and down $16 million year-to-date in 2024.
While it's not considered a meme stock, Tesla Inc TSLA is one of the most shorted stocks, prompting an update from Dusaniwsky.
The expert said short interest in Tesla is $18.3 billion, making it the fourth most shorted U.S. stock, trailing Nvidia Corp ($35.7 billion), Microsoft Corp ($24.0 billion) and Apple Inc ($23.0 billion).
Dusaniwsky said Tesla shorts are down $696 million in June.
With Tesla shares down 26.8% year-to-date in 2024 and putting in one of the worst performances for an S&P 500 stock, short sellers in the electric vehicle company are still profitable so far this year. Dusaniwsky said Tesla short sellers are up $5.4 billion year-to-date in 2024.
Related Link: Tesla Loses Most-Crowded Short Stock Crown To This Oil Giant
Why It's Important: The rapid increase in GameStop and AMC shares following Roaring Kitty’s return to social media likely triggered significant short selling.
Citron Research's Andrew Left was among the people who bet against GameStop by shorting the stock once again. Left was a central figure in the 2021 GameStop storyline and lost money shorting GameStop. Left recently announced he had exited his short position in the video game retailer.
GameStop shares have remained highly volatile around key Roaring Kitty events like social media posts and his livestream. An annual shareholders meeting event on Monday could put shares back in the spotlight.
The box office is struggling in 2024, but AMC sees a strong second half of 2024 and years ahead. AMC CEO Adam Aron has previously cautioned short sellers against betting against the company.
Tesla CEO Elon Musk is not a stranger to calling out short sellers. A pay package for Musk was recently approved by shareholders, which may have been causing an overhang on the stock. Short sellers saw a potential risk that Musk would leave the company if the pay package had been voted down.
Read Next: Life Imprisonment For Short Selling? South Korea Extends Ban, Harshens Penalties
Image generated using artificial intelligence via Midjourney.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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