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Gamestop, AMC short squeeze over ?

AMC and Gamestop further down this week

GameStop and AMC shares dropped further today – December 14th – following the recent stock market downtrend. It is estimated that short sellers recovered more than 1 billion in losses.

Earlier this year retail investors coordinated on social media platforms – such as Reddit – to trigger a historical short squeeze. The aftermath cost institutional investors billions of dollars.

Price action history

AMC is currently trading at 7 month low of $21.31, the fourth consecutive day of losses. Gamestop also lost aprox. 4% of it’s value currently trading at $131.

With the recent decline of stock market assets, short sellers have won 1.1$ bln. on their positions in AMC since the beginning of December while the ones who have positions in Gamestop capitalized $330 million.

Nevertheless, the bears have lost 1.3$ bln on AMC and 11.78$ bln in Gamestop since the start of the year because of the stated short squeeze.

Debated numbers

The alleged short interest of AMC increased to 19% from the publicized free float ( number of available, tradable shares on the market) of 16% at the end of November. Similarly, Gamestop’s short interest increased from 11% to 14% in the same timeframe.

The alleged public data is highly contested though as it’s been shown in multiple public congressional hearings that the current failure to deliver ratio was – in some instances – higher than 100% for AMC. This would mean that the total number of shares being held combined with the free float and the ones presented from shorting , will amass more than double of the total number of shares existing of AMC. Some argue this is possible with the existence of dark pools that institutional traders have access to which are – in essence- a separate market which allows for shares to be pooled for a certain amount of time before they are being sent to the actual markets like NYSE.

A steady decline

Concerns about the new Covid variant – Omicron – has further fueled the sell of insiders as theater attendance tends to dramatically reduce on the event of a new variant spreading.

For the first time ever since March 2021, retail traders have started dumping on the stock.

It would seem that AMC investors are worried about the reopening theme with the new variant, causing the price to tank.

Would this be the end of the Mother of All short squeezes ( MoASS) ?



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