GameStop and AMC shares soar on another day of fierce trading in companies that are significantly in short supply

GameStop Corp.’s equity movement continued to change efficient market theory on Wednesday, reaching a record of over $ 24 billion in retail chains.

GameStop GME,
+ 134.84%
It rose 157% to a daytime high of $ 380 on Wednesday and closed at $ 347.51 with a closing price of 90 million shares, up 135%. This continues to be the trend for GameStop to be one of the most traded stocks in the United States and outperform market tycoons like Apple Inc. AAPL.
And Tesla Inc. TSLA,
The average daily trading volume of this stock has been around 10 million shares in the last 52 weeks, and this average has increased rapidly in recent years.

After users of the Reddit board encouraged readers to force a short squeeze of such stocks, GameStop added many other significantly short-circuited stocks targeted by investors on Wednesday. The most prominent is the theater chain AMC Entertainment Holdings Co., Ltd. AMC,
+ 301.21%,
This quadrupled on Wednesday’s trading and closed at $ 19.90. Bed Bath & Beyond Ink BBBY,
+ 43.45%
Shares rose 43%, National Beverage Corp. FIZZ,
+ 40.17%
Stocks surged 40%. Even the United States traded Nokia shares.
+ 38.48%
Despite a shortage of only 0.9% of American Depositary Receipts, it seems to have joined the bill, surged 38% on Wednesday.

Due to Wednesday’s move, GameStop shares have risen by more than 1,700% year-to-date, or more precisely in the last 17 trading days. This is because long-positioned Reddit social media traders are trolling Wall Street companies trying to win every short possible short. According to FactSet data, there are stock positions with an average analyst price target of $ 13.44. The rocket was launched on January 13th, when GameStop’s share surged by more than 60% in one day.

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Due to the backlash, some brokerage firms restricted the trading of stocks. At a press conference Wednesday, White House spokesman Jen Psaki said the Biden administration’s economic team, led by the newly established Treasury Secretary Janet Yellen, was “watching the situation,” including a game stop. At a press conference following the central bank’s policy meeting on Wednesday, Fed Chair Jerome Powell declined to comment when asked about GameStop. Massachusetts top securities regulators say GameStop needs to be closed for a month, and renowned “BigShort” investor Michael Burry, who publicly acquired GameStop last year, said it was “unnatural.” He said there should be “legal and regulatory implications”. “Insane and dangerous” transactions.

Ihor Dusaniwsky, head of forecast analysis for financial technology and analytics firm S3 Partners, which specializes in analyzing short-cell data, told MarketWatch: “We have seen price behavior for such significantly short-circuited stocks so far. I have never done it. ” It’s in the same stadium. ”

GameStop on Wednesday joined Tesla, Apple and Inc. AMZN,
As a stock with a short-term interest rate of over $ 10 billion, according to S3 data. Tesla CEO Elon Musk seems to have joined the mania after tweeting about GameStop shares Tuesday afternoon.

According to Dusaniwsky, short positions currently account for 140% of GameStop’s impossible floats. This is a result of a flaw in the short interest calculation method, which in the case of GameStop is significantly exacerbated.

He said short selling produced a “synthetic long” that was taken into account in the calculation. Simply put, when a short sale occurs, a short position is calculated for each stock when the short seller borrows the stock, but two long positions are considered in the equation. One is the long position of institutional beneficiaries. Analysts described one for long buyers on the other side of stocks and short sales.

read: Stop laughing at GameStop stock enthusiasts — no, really

“All three investors have the right and ability to buy and sell their shares at any time. [the stock’s] The float hasn’t changed, the amount is [the stock’s] The number of stocks that can be traded has increased, “Dusaniwsky said.

According to Dusaniwsky, modifying the synthetic long will leave about 58% of GameStop floats shorted. At $ 380 per share, he said year-to-date shorts would fall $ 25.87 billion.

Similarly, stocks with very high short-term interest rates of over 50% (using standard calculations including “synthetic long”) rose on Wednesday.

See: Even Reddit is starting to talk about wild GameStop ride endgames

B. of A. Securities analyst Curtis Nagle said in a note Wednesday that it was undervalued and raised GameStop’s price target from $ 1.60 to $ 10. When the company reports weak earnings on holidays around April, it expects stocks to begin to return to Earth.

“It’s hard to know if very high short-term interest rates and retail ownership could continue to put upward pressure on equities (which promotes both tight equity supply and volatility), but fundamentals I think it will affect valuation again, “said Nagle.

GameStop and AMC shares soar on another day of fierce trading in companies that are significantly in short supply

Source link GameStop and AMC shares soar on another day of fierce trading in companies that are significantly in short supply

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