New S3 Partners Data Reveals $GME Short Bets Decline

The retail-hedge fund battle rages on. We’ll reveal more $GME insights tomorrow morning. Meanwhile, follow us on Twitter for updates.
By Ihor Dusaniwsky

Last week, the brick-and-mortar video game retailer GameStop hijacked the national conversation as a tidal wave of retail investors bandied together to buoy the company’s stock in a social-media-led move against short-sellers. The resulting dynamic also upended the share price of several other companies, led to a social-media revolt against the Robinhood trading app, united the unlikely political bedfellows Ted Cruz and Alexandria Ocasio-Cortez, and generally left investors scratching their heads about what was to come next.

S3 short insight data foresaw GameStop’s meteoric rise. Last Monday, in fact, company founder Robert Sloan presaged the stock movement on Bloomberg TV. Now, the firm’s singular analysis foreshadows where the stock is headed this week.

An early peek into our algo reveals a decline in GameStop shares shorted, as short sellers trim and liquidate their holdings. Our analysis suggests a decrease in overall shares shorted, dipping below the 30 million share level. (Watch this space for more analysis tomorrow.) Moreover, S3 data reveals that trading in the latter part of the last week gave short sellers exit points below GME’s high water mark levels and reduced their mark-to-market losses. A portion of Friday’s gains can be attributed to short sellers buying-to-cover shoulder-to-shoulder with long shareholder buying.

It doesn’t look like there will be a pause in GameStop’s stock price volatility, as both the long and short side should remain active. The short side may be covering at the moment, but they can turn on a dime and resume short-selling as stock loan availability from previous short covers hits the market. If long-side buying turns into profit-taking, new short sellers may jump back into the fray and help push GME stock prices down.

S3 Partners puts the predictive in analytics, allowing both long shareholders and short sellers to separate the signal from the noise. Bloomberg users can check out our Black App at https://blinks.bloomberg.com/screens/apps black. Otherwise, please use our Shortsight data tool https://www.25.screener.shortsight.com/. We’ll reveal more $GME insights tomorrow morning. Make sure you’re following us on Twitter for updates.

For deeper insight into short side data and analysis contact me at Ihor.Dusaniwsky@S3Partners.com.

For short side data and access to our research reports, visit shortsight.com.

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