Short sellers betting against GameStop faced staggering losses in Monday's remarkable surge, amounting to nearly $1 billion.
Monday's astonishing surge in GameStop led to losses nearing $1 billion for short sellers, as reported by data from S3 Partners.
With GameStop's remarkable 74% climb, hedge funds engaged in short-selling suffered a mark-to-market loss of $838 million in the traditional video game retailer, revealed data firm S3 Partners.
Ihor Dusaniwsky, Managing Director of Predictive Analytics at S3, commented, “Expect short covering in this stock as it already had a 100/100 squeeze score prior to today’s trading.”
The sudden upswing in the stock was apparently instigated by "Roaring Kitty," previously known for rallying a legion of day traders to invest in the gaming stock in 2021, an event that left an indelible mark on Wall Street history. The internet personality, legally known as Keith Gill, resurfaced by posting an image of a video gamer leaning forward on their chair, seemingly indicating seriousness in the game—a post marking his return to the platform since 2021.
The frenzy surrounding "meme stocks" involved individual investors targeting short sellers and hedge funds skeptical about the prospects of GameStop and other companies, compelling them to close their short positions and driving up the prices of the targeted stocks.
Currently, the short position in GameStop shares represents over 24% of its freely tradable shares, also referred to as the float, according to data from FactSet.
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