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GameStop (GME) has already had all week, up nearly 80% since Monday following news that board member and investor Ryan Cohen will play a key role in trade strategy business electronics.
The Bulls expect the presence of Cohen, who founded pet retailer Chewy, to help the company realize the potential GameStop fans believe they have as they grow from a business-focused business. brick and mortar to something more modern.
GameStop Bulls who see the company as an underrated long-term value game may not pay as much attention to the movement of the action, but it’s hard to miss the roller coaster ride. As the stock skyrocketed on Wednesday, short interest continued to decline, perhaps after short sellers learned their lesson from the squeeze in late January, losing billions.
But according to Ihor Dusaniwsky of analytics firm S3 Partners, the short squeeze will continue.
“We should see selling pressure on GME continue and shorter stock coverage as mark-to-market losses increase,” he told Yahoo Finance on Wednesday. “But as the stock continues its rapid rise, there will be short sellers waiting behind the scenes looking for entry points if this rally loses steam and GME’s stock price returns. “
Short interest may have fallen, but it remains significant: $ 2.76 billion with 11.18 million shares short, 20.52% short interest percent of free float or 17.02 %, depending on how you calculate it, according to Dusaniwsky. (S3 prefers the latter, because it doesn’t count synthetic longs created from a short sale. If that’s confusing, S3 has a good explanation here.)
To put that in context, the same AMC Entertainment stock has a short float interest percentage of 17.32%. Tesla, another notorious shorted company, is at 5.98% and Amazon at 1.03%.
“It hasn’t been a profitable trading week for GME’s short sellers, after falling – $ 1.36 billion on Monday and Tuesday,” Dusaniwsky said. “[Wednesday’s] The + 7% price change added another – $ 202 million in further losses to market value. “
In total, GameStop shorts have lost $ 6.8 billion since the start of the year, Dusaniwsky said.
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Ethan Wolff-Mann is a writer at Yahoo Finance who focuses on consumer issues, personal finance, retail, airlines, and more. Follow him on twitter @ewolffmann.
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