The frantic market action in small-cap stocks like Gamestop GME,
and AMC Entertainment AMC,
has provoked incredible reactions on Wall Street.
But while some may be tempted to dismiss them as a side show, this Société Générale chart suggests that gains shot up in a very short stock shortage is a much broader phenomenon.
In fact, the shortest shares of the $ 3 trillion Russell 2000RUT index have made huge gains since the end of last year, surpassing the rest of the peers.
The 5% shorter has doubled in value since the end of October, surpassing the next 5% shorter, which in turn outperformed the shorter shares.
“This upper tranche has been detached from the next, which implies that the short interest rate itself is the goal of much of this activity,” said Andrew Lapthorne, head of quantitative equity research at Société Générale, in a note on Wednesday.
I’ll see: It’s not just about GameStop: Here are some of the other very short actions that shoot above
Analysts have suggested that retailers that focus on platforms like Reddit and Discord were actively looking for stocks with a high percentage of short interest in an effort to generate a small squeeze. The hope was that short sellers in the face of punishing losses would cover their shorts and recover stocks, accelerating profits.
The S&P 500 SPX,
the Dow Jones Industrial Average DJIA,
and Nasdaq Composite COMP,
they are at a 2% loss rate this week.
Read: Is GameStop and AMC Negotiation a Major Risk? Analysts weigh