Short sellers lost $618 million following the rally in meme stocks GameStop Corp. ((NYSE: GM)E) and AMC Entertainment Holdings Inc. (NYSE: AMC) on Tuesday, according to data from analytics firm Ortex.
What Happened: Video game retailer GameStop’s shares rose more than 16% on Tuesday and closed above $200 a share for the first time since mid-March, while movie theater chain AMC Entertainment’s shares gained almost 20% on the same day.
Since the beginning of the month, short sellers — those betting for declines in the company’s shares — have lost $607 million in AMC Entertainment and $442 million in GameStop, according to Ortex. AMC’s share price has risen 64% this month, while GameStop has gained 21%.
Ortex co-founder Peter Hillerberg noted that the sharp price increase may prompt short position holders in the stocks to try to close their positions by buying back shares and create additional demand that may result in the share price going up further.
“This is what the ‘Reddit army’ is hoping for and is called a ‘Short Squeeze,’” Hillerberg said.
See Also: Gamestop, AMC Latest Stock Surge Costs $930M Loss For Short Sellers In A Week
Why It Matters: The Ortex data indicates that retail investors are once again showing interest in heavily shorted stocks and the hedge funds that hold those positions.
Heavily shorted stocks like AMC Entertainment and GameStop stole the limelight earlier this year after a flurry of buying by amateur retail investors on Reddit pushed up the price of these stocks and caused huge losses among short-sellers, including hedge funds, which had bet against the stocks.
AMC Entertainment’s stock has returned year-to-date gains of 545.28%, while GameStop stock’s year-to-date returns stand at 855.47%.
price Action: GameStop shares closed 16.3% higher in Tuesday’s regular trading session at $209.43 and added 3.1% in the after-hours session to $216.00.
AMC Entertainment shares closed almost 20% higher in Tuesday’s regular trading session at $16.41 and further rose almost 4.1% in the after-hours session to $17.08.
Read Next: AMC Entertainment CEO Takes To Social Media To Connect With New-Found Backers, The Retail Investors
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