GameStop, AMC Surge Burns Short Sellers: This Hedge Fund May Have Been On The Right Side Of The Trade

Original meme stocks GameStop Corp GME and AMC Entertainment Holdings Inc AMC are taking a bit of a breather Wednesday after exploding higher to start the week. The losses from short-selling hedge funds are piling up, but it appears at least one hedge fund may be on the right side of the trade.

What To Know: According to a new filing with the SEC, hedge fund Renaissance Technologies ended the first quarter with over one million shares of GameStop.

The 13F filing also shows that Renaissance Technologies increased its stake in AMC by 78% in the first quarter. The investment firm owned a total of 8.7 million shares of AMC at quarter’s end.

Why It Matters: It’s not clear if Renaissance Technologies maintained positions in GameStop or AMC through the recent surge, but if the hedge fund is still holding, it’s likely up a healthy amount on its meme-stock investments, while several short-selling firms have suffered sizable losses.

According to Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, short sellers in GameStop stock lost approximately $838 million on Monday and were down another $1.36 billion around midday on Tuesday. AMC short sellers reportedly lost $127 million on Monday and were down another $244 million at the last update Tuesday.

Despite Wednesday’s pullback, GameStop shares are still up more than 115% for the week, and AMC shares are up approximately 70%. The rally started when Keith Gill, best known as Roaring Kitty, posted a simple meme of a person leaning forward in a chair following a three-year absence from social media.

Gill posted a series of videos on YouTube leading up to the historic short squeeze in 2021. When GameStop shares started squeezing, the trader began posting updates of his positions on Reddit's r/WallStreetBets. Gill is often credited with sparking the meme stock mania that took place in 2021.

It’s worth noting that Gill hasn’t provided an update on his GameStop investment from 2021, so it’s not clear if he maintains a position. He’s mainly just been posting video clips on X throughout the week.

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GME, AMC Price Action: At publication time, GameStop shares were down 24.43% at $36.84 and AMC shares were down 20.29% at $5.46, per Benzinga Pro.

Photo: Shutterstock.