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Where Shorts are on the Run (GME, TGGI, AMC)

Since the Reddit rally for heavily shorted stocks in late January, a buzz has remained in the air, and long-side traders continue to go on intermittent “raids” in highly shorted names, sparking sudden rips. It’s a dangerous world for bears these days.

And, with the Fed at its easiest possible levels, trillions in fiscal stimulus continuing to go out the door, vaccine distribution ahead of schedule, and investor enthusiasm continuing to be stoked by no-commission app-based trading, that’s not likely to change.

With that in mind, we take a look a few interesting squeeze candidates, including: GameStop Corp (NYSE:GME), Trans Global Group Inc (OTCMKTS:TGGI), and AMC Entertainment Holdings Inc (NYSE:AMC).

 

GameStop Corp (NYSE:GME), as noted above, has been at the center of the short interest excision that has taken place across the market over the past several months.

The company trumpets itself as a company that operates as a multichannel video game, consumer electronics, and wireless services retailer. It operates in five segments: United States, Canada, Australia, Europe, and Technology Brands.

GameStop Corp (NYSE:GME) is up more than ten-fold so far this year, and just put out earnings yesterday afternoon following the close.

Although the company missed on profit, revenues, and sales comps, shares initially popped higher off the print after the company announced that it had named ex-Amazon vet Jenna Owens as its new COO.

However, shares sunk following the initial excitement. But fundamental reports were never going to be a fun time for GME longs. Now that the stock has made it past that barrier, it will be interesting to see if the squeezers get back to work.

GameStop Corp (NYSE:GME) has had a rough past week of trading action, with shares sinking something like -13% in that time. That said, chart support is nearby, and we may be in the process of constructing a nice setup for some movement back the other way.

 

Trans Global Group Inc (OTCMKTS:TGGI) is another heavily shorted name. It’s a bit more difficult to nail down what the company does, but recent rumors point to a possible reverse merger underway with a Chinese nano-technology wine and spirits producer.

But this is not definite or established as a matter of public record.

Trans Global Group Inc (OTCMKTS:TGGI) certainly does have its share of shorts woven into recent action. According to OTCShortReport.com, TGGI has seen more than 60% of all of its transactions occur from the short side on 12 of its last 21 trading days.

And this is particularly important given the stock’s strength over the past few days. As the stock rallies, the pressure builds on overleveraged shorts to reduce or eliminate that short exposure, which is just more buying that puts more pressure on shorts still holding out. That’s why they call it a squeeze.

Trans Global Group Inc (OTCMKTS:TGGI) is a penny stock and an unknown quantity in terms of business model. But what we know already is that the stock appears to be packed full of shorts and rallying hard.

 

AMC Entertainment Holdings Inc (NYSE:AMC) is another big squeeze play on the trading radar in recent action.

The company trumpets itself as the largest movie exhibition company in the United States, the largest in Europe and the Middle East, and the largest throughout the world, with approximately 1,000 theatres and 10,700 screens across the globe.

AMC Entertainment Holdings Inc (NYSE:AMC) recently announced that since December 14, 2020, it has successfully raised or signed commitment letters to receive $917 million of new equity and debt capital.

This increased liquidity should allow the company to make it through this dark coronavirus-impacted winter.

While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action AMC shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -18% on above average trading volume.

AMC Entertainment Holdings Inc (NYSE:AMC) managed to rope in revenues totaling $162.5M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of -88.8%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($321.4M against $1.6B, respectively).

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