GameStop and AMC short-sellers just lost $618 million in a single day as meme stocks rallied sharply

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  • GameStop and AMC jumped Tuesday, causing short sellers to lose $618 million in one day: ORTEX.
  • Shorts on the two Reddit-favorites have lost more than $1 billion so far this month.
  • So far this week, shares of AMC are up 36% and GameStop is up 19% since Friday's close.
  • See more stories on Insider's business page.

New rallies in Gamestop and AMC stock caused short sellers to lose $618 million on Tuesday alone, new data from ORTEX shows.

The meme stocks continued to rise in after-market trading and early on Wednesday, pushing short-sellers' one-day losses even higher to $754 million, according to ORTEX.

GameStop rose 16% Tuesday, closing at $209.43, while AMC rose 20%, closing at $16.41. Both stocks continued to rally in pre-market trading Wednesday.

"AMC and GME have yet again had an incredible start to the week," said Peter Hillerberg, co-founder of ORTEX. "As the short positions in these stocks are very large, this also generates large losses for anyone holding a short position."

In total, short seller losses have tallied more than $1 billion in May amid the month-long rally in AMC and GameStop, which have jumped 64% and 21%, respectively.

Per stock, AMC shorts have lost $607 million and GameStop shorts have lost $442 million in May, ORTEX data show.

Short interest in both stocks remains high. According to MarketBeat data, GameStop short interest is at 20.8%, and AMC is at 19.5%.

GameStop and AMC have been two of the most hyped stocks on Reddit this week, according to HypeEquity data. Early on in the week, retail traders on the Wall Street Bets subreddit cheered newly available shares of AMC after the company's largest shareholder, Chinese conglomerate Dalian Wanda Group, sold nearly all of its remaining stake in the movie theater chain.

"We now hold the future of this company!" one Redditor posted following the news.

The meme-stock phenonmenon blossomed earlier this year when an army of retail traders on Wall Street Bets caused shares of GameStop to skyrocket, squeezing short sellers. The traders have driven up prices for other stocks, like AMC and BlackBerry, as well. They are also looking for new targets, and might be eyeing a heavily shorted real estate lender for a new short squeeze.

The bouts with Reddit day traders have taken short sellers on a wild ride.

In just five trading days from May 11-17, short sellers posted $930 million in losses. Also last week, Melvin Capital, the hedge fund that lost more than 50% in a single month betting against GameStop, closed out of all of its public short positions, though it could still be shorting stocks privately.

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