GameStop Shorts Have Lost More Than $3 Billion in 2021


Short-sellers betting against GameStop have lost $3.3 billion as of Friday.

On Monday, GameStop shares more than doubled to nearly $160 in the morning before falling to $70 in a massive and imminent sell-off. On Friday alone, short-sellers lost almost $1.6 billion, according to data from the financial-analytics firm S3 Partners.

Massive volatility in markets has led to a new market battle between Reddit users and institutional investors. WallStreetBets, a popular subreddit, started pumping up the stock not long after GameStop announced that it would add three new directors to its board. GameStop shares at their high today were more than 500 percent year-to-date and more than 2000 percent in the past year.

In addition to the WallStreetBets influx of demand, many short sellers have had to cover their shorts by buying back shares which have driven prices higher. Despite the massive gains, the demand for shorting the stock remains high. According to S3, 140 percent of GameStop's float was shorted as of Friday.

"There has been a queue of new short-sellers wanting to get short exposure in GameStop after its recent run-up," Ihor Dusaniwsky, the managing director of predictive analytics at S3, said.

Andrew Left has been the most prominent GameStop short. He posted a video last Thursday criticizing the excessive run-up and was met with memes and derogatory comments from WallStreetBets followers. On Friday, he stated that he would no longer comment on the stock.

As of 1:28 PM EST on Monday, GameStop shares were trading around $68.42.

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Economics, Finance and Investing