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Meme-Stock Hits Short Sellers With Over $1 Billion Losses

May paper losses in AMC, GME were more than $1.3 billion: S3

Heavily-shorted stocks continue to jump in Tuesday’s trading

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 Bloomberg chart

Traders betting against some of the most heavily-shorted stocks are racking up paper losses in an unexpected revival of the meme trade this week.

A Goldman Sachs basket that simultaneously goes long on the stocks most favored by hedge funds and bets against the 50 most-shorted stocks has fallen roughly 13% over the past two sessions — on track for its worst two-day slump since the height of the retail-trading frenzy in 2021.

Underscoring the performance was a surge in the stocks once popular with the day-trading crowd including GameStop Corp. and AMC Entertainment Holdings Inc. The heavily-shorted names extended gains on Tuesday after each jumped more than 70% in the prior session, leading a rally in companies with high short interest.

Bearish bets on the pair have lost more than $1.3 billion in mark-to-market losses this month: GameStop shorts lost $1.24 billion in May, while AMC shorts lost around $126 million, according to data from S3 Partners LLC.


Image: memestock