The shares of GameStop Corp. reversed their course on Monday and retreated from their weekly record gains after eliminating more than half of the short positions on the stocks.
GameStop GME,
Shares fell a whopping 35% during Monday’s trading and were last about 23% lower at $ 251.31. The volume reached more than 24 million shares by noon. In the past 10 trading days, the daily volume averaged 92.2 million shares and an average of 11 million shares per day over the past 52 weeks.
Last week, GameStop’s stock rose 400% in an extremely volatile trading week in which retail investor loyalists of the stock collected through the Reddit WallStreetBets thread clashed with institutional short sellers on Wall Street.
Ihor Dusaniwsky – the head of predictive analytics at financial technology and analytics firm S3 Partners, which specializes in analyzing data on short selling – said Monday that the “short squeeze has begun” on GameStop, although some speculated that a short squeeze was boosting the stock in mid-January.
The number of GameStop shares that went short fell by 35.2 million last week, leaving 27.1 million short positions. Shorts have lost more than $ 13 billion at GameStop in 2021 alone, even after gaining $ 1.9 billion in Monday’s downturn, Dusaniwsky said.
“Both fundamental short sellers and momentum short sellers have found opportunities and price exit times to constrain their positions in the face of these losses, as the GME short squeeze is in full effect,” Dusaniwsky said in email response.
Meanwhile, the stock is most likely being said in the same breath with GameStop, AMC Entertainment Holdings Inc. AMC,
was up about 7% to $ 14.14, even as an analyst downgraded the stock to a sell rating and lowered its price target to $ 1.