AMC and GameStop’s short sellers make a comeback as memes soar

Dec. 14 (Reuters) – Shares of AMC Entertainment (AMC.N) and GameStop (GME.N) fell further early in Tuesday, extending declines that helped short sellers recover more than one billion dollars in losses in December.

Both companies were at the heart of the memes phenomenon earlier this year, when individual investors coordinated on online forums to fuel mind-blowing rallies that have cost short sellers billions of dollars.

Movie chain AMC fell 8% to a new 7-month low of $ 21.31 and was on track for a fourth day of losses, while video game retailer GameStop lost 4.3 % at $ 131 – its lowest level since March.

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Short sellers have made $ 1.1 billion in their positions in AMC stocks since early December, according to data from analyst firm Ortex. GameStop short sellers have made $ 330 million since the start of the month. Both stocks lost almost a third of their value in December.

Yet so far this year, bearish investors have lost $ 1.3 billion on their bets on AMC and $ 11.78 billion on GameStop, with their shares increasing by around 1,000% and 600% respectively since. the beginning of the year.

Estimated short interest at AMC rose to 19% of its free float, from 16% at the end of November, according to Ortex data. GameStop’s short-term interest jumped to 14% from 11% during the same period.

Insider sales to AMC last week added to concerns over the Omicron variant of the coronavirus which has started an upturn in theater attendance.

Retail traders were net sellers of stocks for the first time since March 2021 in the week leading up to December 8 in the biggest outing since September 2020, JPMorgan data showed last week.

Sam Stovall, chief investment strategist at CFRA Research, said AMC investors worried about reopening the trade, with comments from the UK that Omicron infections could turn into a tidal wave weighing on the feeling.

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Report by Medha Singh and Bansari Mayur Kamdar in Bangalore; Editing by Saumyadeb Chakrabarty

Our Standards: Thomson Reuters Trust Principles.

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