One of the top short squeeze candidates of 2022 is no longer a candidate for high short interest with a buyout offer taking the company private after being public for 16 months.
What Happened: Outdoor grilling company Weber Inc WEBR had been a popular short squeeze candidate with the stock seeing high short interest and a high cost to borrow.
The company was the target of a buyout offer from BDT Capital Partners in late October, with BDT offering to acquire all shares it did not own for $6.25 each.
Earlier this week, Weber agreed to be acquired by BDT for $8.05 per share, valuing the company at $3.7 billion.
The buyout comes as the stock ranks 10th on Fintel’s short squeeze leaderboard with 33.7% of the float short and a cost to borrow of 16.7%.
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Why It’s Important: Weber was highlighted by Benzinga as one of the most popular short squeeze candidates of all publicly traded companies.
In October, the stock ranked among the most popular short squeeze candidates with 48.9% of the float short and a cost to borrow of 32.2%.
In August, Benzinga highlighted Weber had a strong interest on social media and the Reddit forum WallStreetBets as a short squeeze candidate. A former hedge fund manager shared that the 67% short interest was one of the highest of all stocks.
Shares of Weber went from $8 to $11 over a three-day trading period in August on the heels of the increased social media chatter. The company saw volume on Aug. 18 surpass 17.5 million, well ahead of its 100-day average volume of around 900,000 shares.
The Bill and Melinda Gates Foundation, led by Microsoft co-founder Bill Gates, is an investor in Weber owning 2.5 million shares.
Weber went public in August 2021 at a price of $14. The IPO offering price was below the original range of $15 to $17. Shares hit highs of nearly $20 in the early weeks of trading.
Since going public, the company has struggled with revenue falling on a year-over-year basis and a plan put in place for managing cash flows and liquidity.
Like many other short squeeze candidates, cash and liquidity issues may have put water on the potential trade idea.
Investors who bet on Weber as a short squeeze candidate could now watch their investment go up in smoke and get taken private at around 68% of its IPO price.
Another popular short squeeze stock in 2022 was Redbox, which was acquired by Chicken Soup for the Soul Entertainment Inc CSSE at a huge discount to its original trading price.
WEBR Price Action: Weber shares traded at $8.01 on Tuesday.
Benzinga recently introduced the Moneymaker Index, which shares a weekly list of five stocks that are seeing increased interest from investors. Check out the weekly series here.
Photo: JGA via Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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