Irish traders target short sellers as meme stocks move up

Stocktake: Redditors piled into AMC and GameStop stocks in 2021, says Degiro

The  AMC Georgetown 14 Theatres  in Washington, DC.   Photograph:  Mandel Ngan/AFP via Getty Images

The AMC Georgetown 14 Theatres in Washington, DC. Photograph: Mandel Ngan/AFP via Getty Images

 

Movie chain operator and meme stock AMC was the most-traded stock last month in 10 of the 18 countries – including Ireland – in which discount brokerage Degiro operates.

AMC takes over from another meme stock, GameStop, which Degiro says was the most-traded stock in Ireland in each of the previous three months.

Redditors from all over the world have piled into highly-shorted stocks like AMC and Gamestop in 2021, causing big losses for short sellers in the process. Consequently, the shorts are in retreat; according to Barclays, the number of companies with extremely high rates of short interest has fallen “dramatically”, from 43 to 18.

Shorts aren’t just avoiding volatile meme stocks – they’re avoiding bearish positions in general. Short interest in the median S&P 500 company is near 17-year lows, says Goldman Sachs. Similarly, Morgan Stanley notes that in Europe, short interest in Stoxx 600 companies is near record lows.

George Soros once said he was wary of going against the herd as one is liable to be trampled on – a message being heeded by today’s short sellers.

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