The Next GameStop? 15 Stocks With High Short Interest

The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. On the other hand, GameStop has been relatively clear about its finances and business outlook. The company has kept top-tier auditor Deloitte & Touche since 2013 and frequently updates shareholders in its detailed earnings calls. CEO Matt Furlong is refreshingly straightforward about GameStop’s prospects.

1. Apparently, a cryptic post on X by Keith Gill, aka “Roaring Kitty,” was all it took to once again set off squeezes in some heavily shorted names.
2. Other heavily shorted stocks have been seeing a surge of interest recently as investors look for the next GameStop.
3. There are too many other good companies out there to put money in a stock that requires so much blind faith.
4. Gabe Plotkin, Melvin’s manager, told CNBC that speculation the hedge fund would file for bankruptcy is false.
5. The ad tech firm currently trades for a roughly $100 million market capitalization, valuing its shares at about 0.3X price-to-sales (P/S).
6. He is the former editor of Tom Yeung’s Profit & Protection, a free e-letter about investing to profit in good times and protecting gains during the bad.

Believing GameStop overpriced, hedge funds had “shorted” the company, betting the share price would fall. The one that’s important in this story is called wallstreetbets. More than four million people are in it, usually discussing stocks and shares and where they’re going to invest money. But lately it’s been more about inflicting pain on short sellers, hedge funds and other big financial firms. Many talk about it in terms of evening the ledger with the financial elite, who benefited from years of gains as other people fell further behind. GameStop did host its annual shareholders’ meeting on June 17.

The Next GameStop? 15 Stocks With High Short Interest

The newspaper reported the greater focus on merchandise allowed the company to tap into the lucrative, higher-margin merchandise market of t-shirts, figurines and bobbleheads. The newspaper noted former staff agreed that the Australian divisions’ merchandise pivot has been key to the divisions survival in Australia’s tough retail landscape. The company reported profits of US$9.4 million, US$52.2 million and US$30.6 million for each fiscal year respectively. In a short sale, they borrow a share of GameStop and then sell it. Later, if the stock forex trading vs options trading price does as they expect, they can buy the stock at a lower price and keep the difference.

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With falling revenues and no published turnaround plan, GameStop is not a good long-term investment currently. GME stock primarily rises and falls in response to social media activity by meme stock investors, which may continue to create short-term opportunities. Between 2015 and 2020, GME stock slid from $11 per share to less than $1 per share. The catalyst was meme stock investor Richard Gill, who promoted GME on YouTube and Reddit. Over the next three years, GME’s price took a rocky path downward, hitting about $11 in April of this year.

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GameStop’s stock price surged in 2021 after meme stock investor Keith Gill and a Reddit forum called r/wallstreetbets rallied the public to buy the stock and force a short squeeze. Hedge funds and other investors who had bet on the gaming retailer’s failure incurred losses as the stock price rose. GameStop’s share price, which closed on Tuesday at $147.98 (it’s gone over $300 today) isn’t any reflection of its health or value as a company.

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With options, an investor can buy the right to buy the stock at a later date at a certain price. If the stock hits that target, investors can reap a bigger return than if they simply bought a share. Back then, Gill and other investors identified a massive short position in GameStop — a dynamic that eventually catapulted the stock upward as short sellers aimed to cover their losses. In 2021, the surge in trading was driven in a man for all markets part by investors’ attempt to achieve a short squeeze. Under that scenario, investors drive a sudden spike in the price, forcing a surge of additional share purchases from others who want to cover their previous bet that the price would fall.

“The past 25 years have witnessed a number of sharp short squeezes in the U.S. equity market, but none as extreme as has occurred recently,” Kostin wrote in the note, published on January 29. “In the last three months, a basket containing the 50 Russell 3000 stocks with market caps above $1 billion and the largest short interest as a share of float has rallied by 98%.” They are piling into How to buy enjin coin stocks with high short interest – in other words, companies where many shares are being used to bet against the stock – with the intention of setting off a short squeeze. Usually, a share price would reach a too-good-to-refuse level, and there would be a run to cash in on it. While some people would make a lot of money, and others would lose big, the stock would return to a more normal reflection of the company’s true value and health.

Catherine Brock covers investing, stock market news and related money matters. She has been contributing to Forbes since 2022, sharing relatable insights on undervalued stocks, index funds and retirement investing. GameStop has a bunch of cash, no debt and a dying business model. To be fair, there may be turnaround opportunities involving acquisitions and/or organic growth initiatives. Unfortunately, silence from the leadership team about the company’s future is a dealbreaker. There are too many other good companies out there to put money in a stock that requires so much blind faith.