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GameStop stalls, AMC soars in rare divergence — short interest might hold the key

After posting almost identical charts for weeks, the two biggest names in meme stocks are suddenly no longer twinning, and it appears that a familiar foe is behind the schism.

A stark and rare divergence was evident Thursday between the movement of shares in GameStop Corp.
GME,
+0.05%

and AMC Entertainment Holdings Inc.
AMC,
+23.47%
.
After moving in concert for most of April and May and posting huge rallies this week, GameStop fell back slightly while AMC kept up its rally, surging more than 18%. While both stocks remain popular among the retail investors on social media who fueled their rise, it was the sentiment of short sellers that appeared to play a key role in the morning’s great meme stock forking.

According to Ortex Analytics, short interest in GameStop stock fell off Thursday morning while short interest in AMC was up slightly. The data reinforces the thesis widely held by the retail crowd that short sellers are still a major factor in their trade even after January’s manic short squeeze caused panic and pain for hedge funds betting against both stocks.

“HEDGIES – REAL TALK TIME,” Reddit user PeakedInThe80s posted on r/Supertstonk midday Thursday. “The first one of you to cover your shorts MIGHT be able to scrape together enough shares to make it out alive. The later ones are f—d.”

And it’s not just the Ur-memes that are showing the causality between short interest and price surges.

Shares in plant-based food company Beyond Meat Inc.
BYND,
+11.01%

soared Thursday after the company was revealed to be a target of short sellers. The idea was even promoted by financial TV pundit Jim Cramer, who went so far as to appeal directly to retail investors on social media.

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“Wall Street Bets guys, thanks for considering Beyond Meat,” Cramer tweeted early Thursday. “You have the fire power to add a third. Heavy shorts.”

Cramer, who has a tumultuous virtual relationship with many in the retail community, kept up his funning with a second tweet that referenced the impact short interest has on meme stocks.

BeyondMeat was up by as much as 13% Thursday and Ortex data showed an almost 5% pop in short interest on the stock, a substantial rise.

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