GME Stock – Are we seeing another GME and AMC short squeeze?
GameStop Corp (NYSE: GME) and AMC Entertainment (NYSE:AMC) may be on the verge of another rally after both gaining strong momentum yesterday. In Tuesdays trading session, GME gained 16% while AMC gained an impressive 19.9%. The rally saw AMC stock in particular trending on twitter with #AMCSTRONG seeing over 18.7K tweets. The now infamous WallstreetBets community on social media platform Reddit, has also seen a large spike in AMC and GME mentions.
According to Hype Equity data, the social media volume for AMC and GME mentions has increased by 357% and 640% respectively. Interestingly, it was only last week that HypeEquity founder Travis Rehl noted “There’s a clear desire for a short squeeze either today or very soon” after seeing a surge in mentions for GME and AMC on social media. Although only speculation at this stage, it is clear investors are gaining interest in AMC and GME stock.
Net losses increase for short sellers
The continued momentum in GME and AMC stock has seen short sellers lose $607 Million on AMC stock and $442 Million on GME stock in May according to Ortex data. These losses have been at the forefront of the rally with GME & AMC bulls looking for a further squeeze on short sellers. It seems AMC’s popularity may be attributed to its recent performance gaining 64% this month alone. We will see over the next few days of trading if AMC and GME can maintain the strong momentum seen on Tuesday.
Citi Research analysts says AMC stock is overvalued
Despite the recent gains, Citi Research analyst Jason Bazinet is not so bullish on the current valuation of AMC stock. Yesterday the analyst boosted the firms 12 month price target to $3.70 a share with a sell rating. The analyst highlighted that the firms price target is a valuation of the Q1 earnings alongside AMC raising capital from selling shares at inflated levels. Interestingly, the target had little to no effect on investor sentiment with AMC trading volumes doubling their 65 day average. What we can conclude from this is that the “smart money” consensus is not impacting the share price, which stems from WallstreetBets movement to hit back at large institutions short selling.
In summary, at this stage we can see a vastly growing interest in AMC and GME stock on social media. Whether or not we see a short squeeze of sorts is still up for debate. From what we know, the recent surge in the GME and AMC share price is still damaging short sellers. The next few trading sessions should give investors a better indication as to whether we will see a further rally.
Written by Tyger Fitzpatrick
The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
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