A while back I wrote an article debating which stock you should invest in, AMC or GME stock? The premise of that article was to identify which stock was more convenient for the new retail investor.
See, both are great momentum stocks to hodl, but GME stock is a lot more expensive for the newcomer to buy.
And although AMC has now become the more popular stock, I have a good feeling those hodling GME stock can still see massive gains.
Welcome to Franknez.com – today I want to talk about GameStop stock, ticker symbol GME. Lets look at the data that states this stock is not done climbing up.
Lets get started!
If you’re like me, you probably didn’t get a chance to get in on GameStop before it began to create a ruckus in the financial world.
Or perhaps you were lucky enough to get a few shares.
I’m a strong AMC shareholder and will not buy GME stock only because I rather increase my position in AMC.
AMC’s short interest is higher, utilization is higher, and so are the shares on loan.
It’s also more affordable.
But don’t get me wrong, the reason I’m publishing this post today is because GME stock has enough data that proves it has more juice to squeeze.
So, if you’re holding GME stock, this article should help you armor up your conviction towards your stock.
GameStop Short Interest
GameStop’s short interest is still rather high. GME’s current short interest is sitting at 20.05% via. Ortex data.
Just to compare, AMC’s is at 20.59% which a short interest of 20% or higher is considered extremely high.
GME’s short interest data is updated daily here for free.
Why Does Short Interest Matter?
Short interest the number or percentage of short shares that have yet to be covered.
For stocks with high short interest this means it is possible to squeeze shorts out of their positions.
GameStop stock is considered to have high short interest therefore it has slack to keep moving up.
Not all shorts have covered their positions!
If you hold GameStop stock, keep holding it.
The longer you hold it, the more money short sellers lose on paper.
Once they can’t afford to hold GME stock they’ll be forced to close.
GME Utilization Rate
GME stock utilization rate is currently 100%.
This means the entire available shares in the market are currently being loaned to short the stock.
APPL for example, may have less than 1% because there’s not a large demand for shorting the stock.
A high demand for shorting GME stock means there’s a play to squeeze shorts out of their positions.
GME shareholders still have a chance to make a ton of money.
Short sellers have not backed off from shorting GameStop and continue to play with fire.
Will Utilization Stay Up?
If more short sellers open short positions then GameStop’s utilization will certainly go up.
At the moment, it seems that there’s 100% of the stock that’s being borrowed.
This number fluctuates from time to time.
Those that are still shorting it have been holding on for quite some time.
However, it’s only a matter of time before they too close their positions and GME stock surges again.
GME Stock: Shares on Loan
GME’s shares on loan refers to the number of shares that are being borrowed.
GME stock has approximately 18.67 million shares on loan.
We essentially convert the utilization percentage into the actual number of shares that are being borrowed.
That’s a lot of shares that still need to be covered by short sellers borrowing the stock.
GME stockholders could take advantage of the fact that the stock has been on discount recently.
Especially if you’re still looking to increase your positions in GameStop stock.
Otherwise, GME stock is a hold play right now where patience will bear some sweet fruit very soon.
Charles Schwab Raises Margin Requirements
Charles Schwab just raised margin requirements for short sellers shorting both AMC and GME stock.
This puts short sellers under tough conditions since they’ll need to keep more cash at hand to continue borrowing AMC and GME stock.
And although we’ve seen a little bit of institutional selloff, Charles Schwab continues to hold GME stock.
An institution that has not sold GameStop is Vanguard.
Vanguard is one of AMC’s biggest institutional holder who continues to buy the stock to-date.
So if there’s something GameStop shareholders can take from this is that institutions are still holding GME stock, and there are still enough short sellers to squeeze out of their positions.
How High Will GME Stock Go?
So, can GME stock reach $1,000 per share. It’s certainly a possibility given that GameStop’s dark pool trading percentage is rather high, according to Stonk-O-Tracker data.
Dark pool trading in GameStop has ranged between 30%-50%. This means 30%-50% of short selling has occurred behind closed doors.
Short sellers are able to keep their short borrow fee down with this loophole as well as conjure up naked shares to swap with one another.
However, they’ll eventually have to close every synthetic share they’ve ‘borrowed’ to short the stock.
This is massive for GameStop just as it is for AMC.
Is It Too Late To Buy GME Stock?
I would say that you will no longer be able to buy GME stock below 3-figures.
If this figure is too expensive for you to build your portfolio then it absolutely is too late.
However, if you’re looking to diversify your momentum stock portfolio, GME stock could be a good stock to hold.
Otherwise, you’re better off buying the heavier shorted stock that is significantly more affordable at the moment, AMC.
Subscribe for more stock market news
If you enjoyed this article be sure to share it with someone who needs to see it and subscribe for more stock market and investing news.
New articles are posted daily and emailed out to each reader. Or you can follow me on social media to see when I share a new publication.
Are you holding GME stock?
Let me know in the comment section below how high you think the stock can go.
Read: List of momentum stocks: short interest data
I sold most of my AMC positions from the run up to $65+ and bought more GME, my entry price for AMC was $16. I just believe that GME is a better bet. I am currently 90% GME, 10% AMC.
GME Plus Points:
-Close to $2 billion cash on hand with no debt
-2 large fulfillment centers and transitioning into an ecommerce company
-Huge NFT potential growth market
-The overall gaming industry is set to grow >10% year on year for the next 5 years
-Massive OTM 2 millions puts (to hide the real short interest, SI estimated to be way above 140%)
-Possible crypto dividend that may force shorts to cover
-There are increasing stock valuation reports to show that GME should be valued way above $175 (upside from today’s $160 price point)
-Market cap is much cheaper than AMC (GME $12 billion vs AMC $18 billion currently)
-The outstanding shares of GME is 70 million shares while AMC has been diluted to 510 million shares (this means that the squeeze ceiling price point for GME is much higher than AMC; one should also consider the outstanding shares/float and not just the short interest to consider a squeeze play)
-World class leadership executive team from ex-Amazon, Google, Chewy etc (Why will the executives from top companies leave their comfortable positions if they think that Gamestop is a dying company? Obviously they see the immense potential in Gamestop!)
-Deep F**king Value (the legend himself bought more at $155! $160 is cheap.)
You always have the option to go long on GME unlike AMC. I still think both stock are very solid investment choices. Not financial advice. Good luck to everyone. Moon soon!
Great GME points. You’re wrong on the AMC dilution though. It was a talk many months ago but Adam Aron listened to shareholders and scrapped the idea way back.
I am not sure that you understand what’s going on with GameStop… The SI you see it’s a joke, the real SI is hidden!! Maybe way above 300% right now. The Synthetic Shares that have to be close are in the range of 2 to 3 billions.
You should check Reddit “Superstonk” DD’s and all. I like your articles but you have to get your facts corrected. 💎💎💎💎🚀🚀🚀🚀🚀
There’s no doubt in my mind the synthetic shares floating around are astronomical 🔥🚀🚀🚀