GameStop’s logo screen and trading information are displayed on the floor of the New York Stock Exchange (NYSE) on March 29, 2022.
Brendan McDermid | Reuters
Shares of two Mimi shares rose on Thursday, adding an unexpected wrinkle to a stock market that has been plummeting in choppy trading for more than a month.
GameStop and AMC turned heads early last year when a group of retail investors coordinated deals in online chat rooms to create massive short squeezes in these stocks widely hated by hedge funds and other players. The meteorite rallies caused great pain to many hedge funds and other short sellers involved in these speculative names.
Since then, stocks have retreated from their peak prices, and short sellers are starting to build their positions again. According to FactSet, AMC has a short interest of 19.5%, while GameStop has a short interest of 21.4%.
These big bets against the company can sometimes lead to dramatic one-day moves in the stock, as hedge funds move to close their short positions when the stock goes up, creating more buying pressure. This process is known as short pressing.
Even with Thursday’s big moves, shares remained well below their highs from early 2021. GameStop, which rose to $483 a share on a daily basis last January, was trading between $90 and $100 a share on Thursday.
AMC, which hit $72.62 on the day last June, was at about $12 a share on Thursday.
Since the market capitalization of companies has fallen so much, it is easy for a few commercial stores, or even one large fund, to impose new short squeeze.
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CNBC’s Yun Lee contributed to this report
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