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The post-squeeze selloff in EnteroMedics Inc (NASDAQ: ETRM) took a dramatic 180-degree turn on Friday. Shares are up more than 30 percent in mid-day trading after jumping by more than 50 percent on Friday morning.
EnteroMedics has been all over the radar in the opening weeks of 2017. The stock surged an incredible 1,320 percent in the first six trading days of the year.
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Without any meaningful news related to the company, the move was likely due to an extreme short squeeze. The medical device maker has a significant short position, but its miniscule float of only about 1.6 million shares is likely the driving force behind the bidding war.
According to shortsqueeze.com, EnteroMedics currently has a short percent of float of 14.1 percent. There are more than 228,000 shares held short.
Many short sellers may have piled onto the stock at or near its peak during the initial short squeeze. In fact, Friday’s “aftershock” squeeze may have been triggered by traders that shorted the original squeeze taking profits on their trade.
After peaking at $30.41 in early January, EnteroMedics shares plummeted more than 80 percent in five trading days.
Benzinga PreMarket Prep host Dennis Dick recently warned listeners of the dangers of attempting to trade stocks like EnteroMedics.
“I’ve been trading professionally for 17 years, and I can’t trade this stuff,” he said of the volatile stock.
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.