GameStop & AMC Short Sellers Lose $10.5 Billion After Clawing Back This Quarter

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Investors betting against AMC Entertainment Holdings Inc and GameStop Corporation's shares on the stock market are slowly limping on recovering a small fraction of their losses following the company's share price increase this year. AMC and GameStop Corporation became the center of a public tussle between retail and institutional investors, with the former inflicting heavy losses on the latter after collectively purchasing the companies' shares and driving the share prices to record highs. This led to billions of dollars in losses for the institutional hedge funds, and those who bet against both companies have reversed some of these, with those shorting GameStop shares faring better than their AMC counterparts since June, indicates data from last week.

GameStop Short Sellers Recover Roughly $1 Billion In Losses Since Early June

The latest data, courtesy of S3 Partners, LLC, reveals that by the end of last week, short-sellers who bet against AMC had lost $4.08 billion over the course of this year. The picture was bleaker for those who had targetted GameStop, with the data revealing that the short sellers' year-to-date losses stood at $6.44 billion. Cumulatively, this shows that AMC and GameStop short-sellers have lost $10.52 billion as we exit the third quarter.

GameStop, AMC Short Sellers Recover Losses At $20 Million/day – But Is It Enough? 

However, while these are still staggering losses, data from the start of June reveals that cumulatively, the short-sellers have recovered roughly 12.5% of their losses since then. Back in June, AMC short-sellers had lost $4.5 billion through the year, and GameStop short sellers were in a worse position after having bled $7.5 billion during the first six months of the year. The bulk of this beating came when GameStop's shares soared to a record high price of $343/share, as the retail camp purchased the shares in bulk, and some hedge funds ended up going out of business.

Additionally, the short-interest shares, which stood at 90 million in June for AMC and at 10 million shares for GameStop, now stand at 86 million and 7.7 million for the duo, respectively. This highlights the fact that institutional investors betting against GameStop have been more nervous about their bets when compared to the ones who bet against AMC.

Interestingly, however, while the AMC short interest shares have dropped since June, recent data reveals that they are rising again. For instance, in late August, they stood at roughly 82 million, highlighting that by the end of last week, more than four million short interest shares were added to the bets against the company.

The picture is slightly similar for GameStop, with the short interest shares at their highest levels since late August, when they stood at 7.21 million. However, in percentage terms, the negative sentiment against AMC appears to be stronger. This is underscored by the fact that AMC's short interest shares have grown by roughly 10% since late August, those for GameStop have grown by 6.7%.

The growth in AMC short interest shares is also accompanied by a small increase in the borrowing fee, which currently stands at 1.2% after a 13 basis point increase. For GameStop, the fee remains static at 0.57%.

After closing at $164.89 on the 23rd of August, GameStop's share price jumped sharply by the close at $210.29 the next day. Since then, it has dropped by 8.6% for a closing price of $192.2 yesterday. AMC's share price closed at $36.78 on the 23rd, and it also jumped sharply the next day to close at $44.26. Since then, it has dropped by 7.4% to close at $40.29 yesterday. Both GameStop and AMC are up in pre-market trading at the time of publishing.

The author has no position in any of the stocks mentioned. WCCF TECH INC has a disclosure and ethics policy.
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