GameStop stock rose nearly 75%, Meme season returns again?
GameStop, the US video game retailer, saw its stock price rise by 74%, resulting in heavy losses for short sellers. According to data from analysis firm S3 Partners, hedge funds that shorted GameStop suffered estimated losses of $838 million based on market value.
S3 Partners' Head of Predictive Analysis, Ihor Dusaniwsky, said that before today's trading, GameStop's "short squeeze" score had reached a perfect score of 100, and it is expected that there will be a large number of short positions covering. The sudden surge in GameStop's stock price seems to have been triggered by internet celebrity Roaring Kitty, who encouraged retail investors to buy GameStop in 2021, creating Wall Street history. Roaring Kitty posted on social platform X for the first time since 2021, posting a photo of a game player focusing on the game, implying that the "game" has begun.
In the "Meme Coin" frenzy of 2021, retail investors who concentrated on going long were countered by bearish hedge funds, forcing short sellers to cover their positions and driving up the stock prices of these companies. Currently, more than 24% of GameStop's freely tradable shares are being shorted. According to S3 data, short sellers who have been shorting GameStop since May alone have incurred losses of $1.24 billion.
Dusaniwsky pointed out that buy orders related to short squeezing would drive up GameStop's stock price, but he expects new short sellers to enter the market around $30 to short. He warned that short sellers on these stocks may experience a "turbulent and bloody" market. In addition to GameStop, other meme stocks such as AMC and Reddit also experienced significant gains on Monday, with AMC rising 15% and Reddit rising 9%. #DOGE##PEPE##WIF##MANEKI##POPCAT#