Meme stocks are making a comeback. Again.
Shares of video game retailer GameStop (NYSE:GME)and movie theatre chain AMC Entertainment (NYSE:AMC) allied to their highest levels in months on Wednesday (May 26), with the surge forcing bearish investors to unwind their bets against the stocks.
GameStop shares surged 15.8% to $242.56 U.S., its highest level since mid-March, while AMC shares shot up 19.2% to $19.56 U.S., their highest price since January 27th.
Shares of GameStop and other companies popular on forums such as Reddit's "WallStreetBets" have been climbing in recent weeks and the rally has begun to accelerate. GameStop is now 70% above its low for May, while AMC has risen 95% so far this month.
GameStop's big gains have caused some short sellers to retreat, forced to buy shares to cover their short-sale loans.
Around 958,000 shares of GameStop, worth $201 million U.S., were bought to cover short sales over the last week. Roughly 11.55 million shares of GameStop, or 20.3% of its float, are currently sold short.
Short-sellers in GameStop are down $6.7 billion U.S. in year-to-date mark-to-market losses. A short squeeze helped send GameStop shares up 1,600% in January to a record high of $483 U.S. a share. The stock pared most of those gains the following month, only to bounce higher again in March.
Some analysts pointed to speculation that GameStop may be building a nonfungible token (NFT) platform. Website “nft.gamestop.com” is advertising positions for engineers, designers and other jobs.
With AMC shares now up 822% year-to-date, short sellers are down $1.37 billion U.S. in year-to-date mark-to-market losses.
Tech Insider
