Those Still Shorting Gamestop, AMC Are 'Out Of Their Mind,' Says Cramer

Benzinga2021-05-27

CNBC host Jim Cramer has taken a swipe at investors trying to short “meme” stocks GameStop Corp GME 15.7% and AMC Entertainment Holdings Inc.AMC 19.09%, saying that they are “out of their mind.”

What Happened: The “Mad Money” host made the comments after shares of video game retailer GameStop rose almost 16% and movie theatre chain AMC Entertainment gained more than 19% in Wednesday’s trading session.

“Anyone shorting AMC or GameStop is out of their mind. ... WallStreetBets is too powerful, and trying to bet against them right now is just giving them more ammo,”Cramer said.

Cramer believes both stocks are overvalued at current levels and are not trading based on their fundamentals. This makes shorting them dangerous as they remain favorites of the Reddit traders, he explained.

Why It Matters: The “meme” stocks that were the focus of retail investors on Reddit’s r/WallStreetBets forum earlier this year are riding another wave higher as the Reddit traders attempt to squeeze the stocks higher. GameStop and AMC Entertainment are currently trending across popular social media platforms.

GameStop’s stock has risen 37% and AMC has gained more than 60% this week. GameStop stock’s year-to-date returns stand at 1,187.47%, while AMC Entertainment’s stock has returned year-to-date gains of 822.64%.

Data from analytics firm Ortex has shown that short sellers — those betting for declines in the company’s shares —lost $618 millionafter shares of the two companies rallied on Tuesday.

Price Action: GameStop shares closed 15.8% higher in Wednesday’s regular trading session at $242.56 and further edged up less than 0.1% in the after-hours session to $242.59.

AMC Entertainment shares closed 19.2% higher in the regular trading session at $19.56 and further rose 0.5% in the after-hours session to $19.66.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

  • bossbaby
    2021-05-28
    bossbaby
    Amc hold or take profit? Nah I'll hodl
  • aether
    2021-05-27
    aether
    he will convince u all to sell at 100 maybe, but just shut all the news and only sell when 100k-500k
  • Mythology
    2021-05-27
    Mythology
    Hmmm bad idea really?
  • benlauhh
    2021-05-27
    benlauhh
    To the moon! ????
  • Boink
    2021-05-27
    Boink
    Reddit again?
  • Dirui
    2021-05-27
    Dirui
    Like & comment. Pls
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