GameStop stock retreats from record gains after more than half of short positions eliminated – MarketWatch

GameStop Corp. shares reversed course Monday, retreating from their record weekly gain, after more than half of the short positions on the stock were eliminated.

GameStop
GME,
-28.26%

shares fell as much as 35% in Monday trading, and were last down about 23% at $251.31. Volume was at more than 24 million shares by midday. Over the past 10 trading days, daily volume has averaged 92.2 million shares, and averaged 11 million shares daily over the past 52 weeks.

Last week, GameStop’s stock soared 400% in an extremely volatile trading week where retail investor loyalists of the stock assembled via the Reddit WallStreetBets thread clashed with institutional short sellers on Wall Street.

Ihor Dusaniwsky — the head of predictive analytics at financial technology and analytics firm S3 Partners, which specializes in analyzing data on short selling — said on Monday that the “short squeeze has begun” on GameStop, even though some were speculating that a short squeeze was boosting the stock in mid-January.

The number of GameStop shares shorted fell by 35.2 million over last week, leaving 27.1 million short positions remaining. Shorts have lost more than $13 billion in 2021 alone on GameStop even after gaining $1.9 billion on Monday’s downturn, Dusaniwsky said.

“Both fundamental and momentum short sellers have found opportunities and price exit points to trim their positions in the face of these losses as the GME short squeeze is in full force,” Dusaniwsky said in emailed comments.

Meanwhile, the stock most likely to be said in the same breath as GameStop, AMC Entertainment Holdings Inc.
AMC,
+4.83%
,
was up about 7% at $14.14 even as one analyst downgraded the stock to a sell rating and cut their price target to $1.

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