Market Overview

Zoom Video, Teladoc Lead The Coronavirus Short Squeeze Candidates

Zoom Video, Teladoc Lead The Coronavirus Short Squeeze Candidates

Short sellers have had a pretty good run since mid-February, with U.S. stocks down significantly almost across the board. However, a handful of stocks have had big runs in recent weeks, and S3 Partners analyst Ihor Dusaniwsky said some of those stocks could soon be short squeeze candidates.

Given the volatility and unpredictability of the market, huge up days like Tuesday can catch short sellers off guard, potentially triggering a wave of short covering. Dusaniwsky said there are only six U.S. stocks that have generated more than $100 million in net losses for short sellers over the past month, and two of them have been particularly costly for short sellers.

“While these losses and the relative cheap stock borrow rates preclude me from saying these are all immediate short squeeze candidates, there are several that may get squeezed sooner rather than later,” Dusaniwsky said.

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Short Squeeze Candidates

Here are the six stocks that have generated the most mark-to-market losses for short sellers since Feb. 19:

  • Zoom Video Communications Inc (NASDAQ: ZM), -$710.1 million.
  • Teladoc Health Inc (NYSE: TDOC), -$703.4 million.
  • Regeneron Pharmaceuticals Inc (NASDAQ: REGN), -$146 million.
  • Moderna Inc (NASDAQ: MRNA), -$132 million
  • Gilead Sciences, Inc. (NASDAQ: GILD), -$125.7 million.
  • Domino's Pizza, Inc. (NYSE: DPZ), -$101.3 million.

Dusaniwsky said short covering could start happening when markets begin to rebound, and the stocks on this list could be among the first to get squeezed.

Benzinga’s Take

Some of these stocks, such as Zoom, Teladoc and Dominos, have actually benefited from the quasi-quarantine situation in the U.S. economy at the moment. When the broader market and economy start to get back to normal, traders should remember these red-hot stocks may actually underperform during the recovery.

Do you agree with this take? Email with your thoughts.

Related Links:

7 ETFs To Buy In A Recession

The Most Shorted ETFs Amid The Coronavirus Market Crash

Latest Ratings for ZM

Mar 2020Morgan StanleyMaintainsEqual-Weight
Mar 2020NeedhamInitiates Coverage OnBuy
Mar 2020JP MorganMaintainsOverweight

View More Analyst Ratings for ZM
View the Latest Analyst Ratings


Related Articles (TDOC + ZM)

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