Shorted Stocks Soar

There seems to be two stock markets today. On the surface, the normal stock market appears to be, well, normal. The S&P 500 is down about 1% while the small-cap Russell 2000 is up by 0.5%. Not that much of a big deal.

On our Buy List, Trex (TREX) and Miller (MLR) are at new highs today. Trex is already a 20% winner for us this year. Both Miller and Thermo Fisher (TMO) are 10% winners this year.

That’s the normal market. The other market is what’s happening to stocks with strong short positions. Over the last six months, shares of GameStop (GME) have jumped more than 20-fold. Online message boards have led to heavy buying of GME and that’s caused shorts to close their position and buy the stock.

This has created a cycle that’s caused the stock to leave Earth’s orbit. Shares of GME nearly doubled on Friday and they doubled again today.

The same thing has happened to Bed Bath & Beyond (BBBY). At one point, it was up close to 60% today.

AMC Entertainment (AMC), the movie theater stock, more than doubled this morning. The company has managed to avoid bankruptcy (again).

Posted by on January 25th, 2021 at 11:19 am


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.