Investors betting against GameStop (GME) have, to quote John Goodman’s character in “The Big Lebowski,” entered a world of pain.
Short-sellers with a bearish position in GME were on track to lose more than $7.8 billion today, according to research from S3 Partners.
Ihor Dusaniwsky, the managing director of predictive analytics for S3, said in a tweet that GameStop short-sellers have recorded nearly $20 billion in losses so far in 2021.
The shorts have been squeezed hard as GameStop continues to surge. It was up more than 80% on Friday and has now soared nearly 1,800% this year.
Short-sellers have been forced to buy back stock that they borrowed and sold because they need to return the shares fast or risk losing more money as the stock climbs higher.
Dusaniwsky pointed out in another tweet that movie theater chain AMC (AMC), also a target of short-sellers, is inflicting pain on those betting against it — although the losses aren’t nearly as dramatic. Shorts had lost more than $210 million Friday and nearly $525 million this month.
It’s been a tough week for the bears. Citron Research, a firm that made a name for itself by recommending stocks to short and was attacked online by the Reddit WSB crowd, announced Friday it is no longer going to point out stocks it thinks are overvalued and will instead focus exclusively on highlighting buying opportunities.