Data shows that ‘the vast majority’ of bets against GameStop have already been made


It’s too little, too late for traders looking to place new bets against meme stocks, darling GameStop (GME).

According to data from S3 partners, only 3 million shares are still available to short, with the company’s data showing that 95% of available equity loans are already used to cover shorts.

In other words, of all the company’s shares made available for shorting by investors, only 5% are unsaid.

“The vast majority of GME short selling has already been done, existing short sellers will be able to add some more exposure to their positions and new short sellers can enter the trade – but there is not enough inventory left to borrow to make large trades in the stock,” S3’s Ihor Dusaniwsky said in a note.

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Short sellers bet on a stock’s fall by borrowing shares of a stock that they believe will fall in price, with the goal of selling them back at a lower price and pocketing the difference.

The short stake in GameStop stands at approximately $1.3 billion with 52.9 million shares short, according to the latest figures available from S3 Partners. Not all of a company’s outstanding stock is made available to borrow for short sellers.

Betting against the video game retailer was in the news again this week after Bloomberg reported Tuesday that activist investor Carl Icahn has maintained a short position in the company since last year’s “short squeeze,” which resulted in a rise of more than 2,000% in the GameStop share price in just a few weeks.

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“Timing is everything in shorting GME,” said Dusaniwsky, comparing the January 2021 shorting to the final battle at the end of most video games. At the time, shorts fell by $10.3 billion in market value losses in less than a month.

Billionaire activist-investor Carl Icahn gives an interview on TSTIME Business Network’s Neil Cavuto show in New York, USA on Feb. 11, 2014. REUTERS/Brendan McDermid/File Photo

“There’s a small chance you’ll get out alive, and if you survive, you’ll come out bloodied,” he said. Star of Invincibility,” with an increase of $4.2 billion in mark-to-market earnings for the remainder of the year.

In 2022, GameStop shorts are up a modest $152 million in mark-to-market gains to date, or a 9.5% increase on an average short interest of $1.60 billion.

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Dusaniwsky explained that a short seller who took a position in GameStop on January 27, 2021 is sitting on a large mark-to-market profit and will be difficult to squeeze, especially as it would lead to large realized profit tax payments.

“And in the case of Carl Icahn, his large mark-to-market profits and large capital base that can be used to offset temporary margin calls or high equity borrowing costs make it unlikely that he would be forced to exit his position.”

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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