Anyone shorting AMC or GameStop is out of their mind. . WallStreetBets is too powerful, and trying to bet against them right now is just giving them more ammo, Cramer said.
Despite some optimism around a potential turnaround spearheaded by Chewy co-founder Ryan Cohen, Cramer contended the video-game retailer GameStop remains way overvalued. AMC which still faces headwinds from the rise of digital streaming is also expensive at current levels, Cramer said.
But Cramer said the companies are not trading based on fundamentals, which makes shorting their stocks dangerous as long as they remain beloved by Reddit traders.
Shorting a stock is essentially a bet that it will fall in price. An investor such as a hedge fund borrows shares and then immediately sells them into the market, with the goal of buying them back later at a lower level. Then, the investor returns the borrowed shares, profiting off the price differential.
Stocks Making the Biggest Moves Midday: GameStop, AMC, CVS, Ford & More
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Cramer Says Investors Who Are Short GameStop and AMC Are Out of Their Mind
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