Quick note on the short interest numbers today. Ortex reported a net decrease in borrowed shares of about 29M, which caused some concern that the shorts may be covering more than we thought without seeing the corresponding price action we were expecting.
However, Ortex tracks borrowed shares that are returned. Not necessarily borrowed shares that were sold short, bought back, and then returned.
Ihor Dusabiwsky with S3 Parnters has his own proprietary tracking system, and they do track actual shorted shares returned. According to their data, there was a net return of 1.4M shorted shares this week (1.6% of the total 88.2M shares currently sold short).
This means that hedge funds only actually covered 1.4M short shares this week, and decided to return another 27.6M shares that they had borrowed but not yet sold short (likely because they finally realized what a terrible idea it is to short AMC).
So let’s do some math. Short sellers covered 1.6% of their short position this week, and the share price went up 83%. If you assume the same rate of price increase for each percentage point of short interest covered going forward, then shorts fully covering their position would correspond to a percentage increase of 5,188% over today’s $47.91 closing price. That equals $2,485.60 per share.
And perhaps most importantly, these calculations only account for the covering of LEGAL shorts that are publicly reported to outlets such as Ortex and S3. There are many theories out there on how many illegal/naked/synthetic shares there may be, but the general consensus (backed by some extremely solid DD) is that there are a significant amount, many times more than the number of legal shorts.
You do the math. This thing is far from over.
*This was posted by another person in the comments of another AMC post and I thought it was important to share originally posted by: Sportsfun4all *
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