Investing

Meme Stock Bulls vs Short Sellers: Who's Winning in 2021?

willbuckner / Flickr / CC BY 2.0

Since the huge run-up in share prices for some stocks last January, a meme stock has been defined, more or less, by three characteristics: high short interest, daily trading volume and buzz. Sometimes the signal-to-noise ratio gets a little out of whack and sometimes a new entrant into the fray catches many of us off guard, but these three signals are relatively easy to keep an eye on.

One long-time analyst of short selling is Ihor Dusaniwsky (@ihors3) of analytics firm S3 Partners. In his latest Twitter updates on short interest in meme stocks, he reports data on current short interest, borrow fees and the year-to-date score for longs versus shorts as of Tuesday, August 31.

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Dusaniwsky also sent out a note Tuesday remarking on the recent price spikes in the shares of two meme stocks: Vinco Ventures Inc. (NASDAQ: BBIG) and Support.com Inc. (NASDAQ: SPRT). In his analysis, he notes:

One unusual characteristic that these two new meme stocks have in common is that the total shares shorted in each stock is relatively small in contrast to recent average trading volumes. If a short squeeze does occur, the effect of the buy-to-covers may have a minimal effect on their stock price.

He also notes that there is plenty of short squeeze potential in the OG meme stocks, AMC Entertainment Holdings Inc. (NYSE: AMC) and GameStop Corp. (NYSE: GME).

Short interest in Vinco Ventures totals 10.37 million shares (10% of the total float) valued at $73 million. The borrow fee on the stock is 55.82% of the share price. Short sellers are down about $55 million in 2021 mark-to-market losses on the stock. Vinco’s share price is up about 650% so far in 2021, most of it since August 26. We have more on Vinco in our morning roundup of meme stock movers.

At Support.com, there are 6.02 million shares sold short, comprising just over 60% of the total flow. The borrow fee on the stock is 94.57% of the share price. Short sellers are down $164 million in 2021 mark-to-market losses. Support.com stock is up more than 1,100% this year, most of it since August 20.

Short interest in AMC totals 89.1 million shares, or 17.4% of AMC’s float. The fee to borrow shares to sell short is 1.07% of the share price. So far in 2021, short sellers are down $4.19 billion in mark-to-market losses on AMC stock, while the share price is up more than 2,000%.

At GameStop, short interest totals 7.24 million shares, or 11.47% of the total float. The borrow fee on the stock is 0.57%. So far in 2021, short sellers are down approximately $6.52 billion in mark-to-market losses. GameStop stock is up nearly 1,100% so far in 2021.

Short interest in Tesla Inc. (NASDAQ: TSLA) is 25.8 million shares, or 3.22% of the stock’s total float. The borrow fee on the shares is 0.3% of the share price. So far this year, short sellers are down $865 million in mark-to-market losses. Tesla’s stock is up about 5% so far in 2021.

Another popular meme stock has been Virgin Galactic Holdings Inc. (NYSE: SPCE). Short interest totals 22.02 million shares, comprising 11.73% of the total float. The borrow fee to short the stock is 0.57%. Short sellers are down about $663 million in 2021 mark-to-market losses. Virgin Galactic shares are up around 14% so far this year.

Short interest in Workhorse Group Inc. (NASDAQ: WKHS) is 42.55 million shares, comprising 37.38% of the company’s total float. The fee to borrow shares to sell short is 4.32% of the share price. So far in 2021, short sellers are up $162 million in mark-to-market profits. Workhorse stock has dropped by more than 50% so far this year.

At Skillz Inc. (NYSE: SKLZ), 58.73 million shares are shorted, representing 24.05% of the total float. The borrow fee is 1.82%. So far this year, short sellers are up $420 million in mark-to-market profits on Skillz stock. The share price has dropped about 35% for the year to date.

Short interest in Root Inc. (NYSE: ROOT) is 21.07 million shares, or 33.93% of the stock’s total float. The borrow fee to short the stock is 2.32%. So far this year, short sellers are up $106 million in mark-to-market profits. For the year to date, Root stock is down about 60%.

Among stocks getting the most mentions, according to Quiver Quantitative, on r/WallStreetBets for the past week are GameStop, AMC, Root, Skillz, Tesla and Vinco. According to HypeEquity, among the top 10 buzziest stocks on social media Wednesday are Skillz, GameStop, AMC and Tesla.

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