Meme Stock Monday - GME, AMC & DJT


Ihor Dusaniwsky

Managing Director of Predictive Analytics, S3 Partners

May 14, 2024

Roaring Kitty posted once again on Sunday and meme traders got up off their seats and rebirthed the 2020-2021 meme on Monday. GameStop Corp (GME) opened up +50% and reached an early morning high of +110% after cooling off to the +70% level. AMC Entertainment Holdings Inc (AMC) rode the wave with meme traders pushing its stock price up +30% in early morning trading and Trump Media & Technology Group Corp (DJT) picking up some of the residual demand and surging +10%.

GME short interest is $1.13 billion, 64.49 million shares shorted, 24.1% SI % Float. There has been increased short selling in GME this year with 3.3 million new shares shorted, worth $58 million, a +5% increase in total shares shorted. Over the last thirty days we’ve seen 1.4 million shares shorted, worth $24 million. GME shares shorted have plummeted from the high of 283 million shares in late December 2020 and have stayed in the 45-65 million share range since 2022.

GME short sellers were profitable for the first four months of the year, up $392 million or +47% for the year. Today’s $12.99 move in GME’s stock price hit short sellers with a $838 million mark-to-market loss, -74.4%. May had already eaten up this year’s profits with -$406 million of month-to-date mark-to-market losses before today’s trading.

But with today’s price move, GME shorts are now down -$1.24 billion in May month-to-date mark-to-market losses, -124% and down -$852 million in year-to-date mark-to-market losses, down -101% for the year.

GME is a crowded short with a 90/100 Crowded score. Short interest of $1.13 billion versus the U.S. average short interest of $121 million; 4.07% stock borrow fee versus the U.S. average of 0.66% fee; 19.46% S3 SI % Float versus U.S. average of 4.36%; and 6.45 30-day Days To Cover versus U.S. median of 2.36 days. GME is also a very squeezable short with a 100/100 Squeeze score. Prior to today’s tock price move GME shorts were down -62.5% over the last thirty days and down -28% over the last seven days.

Today’s losses will put a lot of short sellers on tilt and squeeze them out of their positions with their buy-to-covers pushing GME’s stock price even higher than the momentum and day traders could do on their own. But there will also be new short sellers entering the ring with GME’s stock price over $30 being an attractive entry point for new short sellers.

AMC short sellers are also feeling the pain today with the stock up +78%. Short sellers are down -$127 in mark-to-market losses today turning their year-to-date and month date profits to dust. Shorts are now down -$126 million in May month-to-date losses, down -73% and down -$25 million in year-to-date month-to-date losses, down -17.5% for the year.

Just like GME, there will be a significant amount of AMC short sellers squeezed out of their trades, but there will also be a new set of short sellers willing to step into the breach and short AMC at these $5 levels.

DJT is a newer meme stock and was up +11% in morning trading before retracing its price move and ending up just +1.3%. DJT short sellers are down -$3.8 million in mark-to-market losses today, increasing May month-to-date losses to -$49 million, down -16%, and year-to-date mark-to-market losses to $216 million, -133% for the year.

DJT’s mark-to-market losses coupled with its high stock borrow rates of 250-300% fee make it a very squeezable stock. DJT short sellers have been taking combination blows of sky-high financing costs coupled with large mark-to-market losses and we’ve been seeing over a million shares of buy-to-covers over the last week. More DJT shorts will be squeezed out of their trades if its stock price continues to climb.

The meme trade is back and short sellers in stocks like GME, AMC and DJT will be teetering on the short squeeze cliff as their stock prices surge. Crowded stocks with mark-to-market losses are targets for short squeezes and these three stocks fit the bill.

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