(Bloomberg) — The capacity of short-sellers to withstand pain is being tested anew by day traders driving up the share prices of meme stocks like AMC Entertainment Holdings Inc.

Paper losses from the bearish wagers on 10 of the most-shorted U.S. shares amounted to $4.5 billion Wednesday, according to Peter Hillerberg, co-founder of analytics provider Ortex. That includes $2.75 billion in unrealized losses for AMC Entertainment Holdings Inc. following the stock’s 95% surge, rising to nearly $4 billion after adding in GameStop Corp. and Bed Bath & Beyond Inc.

“How much longer can short sellers hold on?” Hillerberg wrote in an email. “The majority of short-sellers have been happy to sit on significant paper losses in the hope that retail investors will blink first and the losses won’t be realized. This now looks like a flawed strategy.”

Professional speculators may still take issue with that last claim. While hedge funds were forced to retreat in late January under a similar withering assault whipped up on Reddit, this time around they are boosting their bearish wagers. Short positions against single shares climbed for a ninth straight week to reach an almost one-year high relative to overall equity holdings, according to prime-broker data compiled by Goldman Sachs Group Inc.

The dynamic contrasts with four months ago, when a rally in meme stocks like GameStop compelled hedge funds to quickly slash their short exposure to the lowest in five years. Goldman Sachs attributes the opposite reaction to the fact that the current carnage has yet to cause widespread pain for the industry.

The steadfastness of hedge funds is evident in AMC shares, where short interest remained elevated even after the stock more than doubled last week. The percentage of shares outstanding sold short edged higher Tuesday to top 20%. As the stock doubled again Wednesday, short interest only slipped below 19%.

Or consider a basket of the 50 most-shorted stocks tracked by Goldman. While AMC has quadrupled this quarter in a blow to short sellers, roughly half of the basket’s members are down. The group is up 2.4% in the span, trailing an advance of 6% for the S&P 500. That means gains for any trade that’s short individual companies and long the broader market.

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“This confirms that managers have felt more comfortable utilizing single names to express directional views or adjust exposures, as highly shorted stocks and high retail sentiment names broadly underperformed in the past two months,” analysts at Goldman’s prime-broker unit wrote in a note to clients. Despite a sharp rally in stocks favored by retail money, “shorts on the group only saw modest net covering,” they said.

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