The data indicates that the “vast majority” of bets against GameStop have already been made
It is too late for traders looking to make fresh bets against GameStop (GME) Mimi Habibi shares.
According to data from S3 Partners, only 3 million shares remain available for shorting, with company data showing that 95% of available equity loans are actually used to cover short sales.
In other words, of all the company’s shares that investors have made available for short sale, only 5% hasn’t been talked about.
“The vast majority of shorting has already been done at GME, existing short sellers will be able to add more exposure to their positions and new short sellers may get into the trade – but there is not enough stock to borrow to execute large trades at S3,” said Ihor Dusaniwsky of S3. On a note.
Short sellers bet that a stock will go down by borrowing shares of stock they believe will fall in price, with the goal of selling them back at a lower price and pocketing the difference.
Short interest in GameStop is about $1.3 billion with 52.9 million shares short, according to the latest available numbers from S3 Partners. Not all outstanding shares of a company are available for borrowing to short sellers.
Bets against the video game retailer are back in the headlines this week after Bloomberg reported Tuesday that activist investor Carl Icahn has held a short position in the company since a “short squeeze” last year that led to a more than 2,000% increase in GameStop’s stock price in just a few weeks. Just.
“Timing is everything when shorting at GME,” Dusaniwsky said, likening the short-selling spree through January 2021 to the final battle at the end of most video games. At the time, shorts accounted for $10.3 billion in market losses in less than a month.
“There’s a small chance of getting out alive,” he said, “and if you survive, you’ll come out bloodied. But, if the shorts have the ability to ‘re-revive,’ the rest of 2021 has been like driving Mario Kart with Star of Invincibility,” with a profit Short of $4.2 billion in market earnings for the rest of the year.
In 2022, GameStop shorts increased by $152 million in year-to-date earnings for the market, or up 9.5% over average short interest of $1.60 billion.
Dusaniwsky explained that a short seller who took a position on GameStop on January 27, 2021 is making a lot of money in the market and it will be difficult to pressure him, especially because doing so will result in paying large realized profits taxes.
“And in the case of Carl Icahn, his large market profits and large capital base that can be used to offset any temporary margin calls or high equity borrowing financing costs make it unlikely that he will be forced out of his position.”
Alexandra Semenova is a correspondent at Yahoo Finance. Follow her on Twitter @employee
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