Potential short squeeze plays gained steam in 2021, with new retail traders looking for the next huge move.
A short squeeze can occur when a heavily shorted stock rises in value instead of falling. Short sellers could be looking to close out their position and can face a loss if they have to buy back the shares they initially borrowed at a higher price.
A squeeze can occur when short sellers are forced into buying to cover their position, which can cause shares to move up on many occasions.
Fintel Data, which requires a subscription, provides a look at several of the top shorted stocks and how likely a short squeeze is to occur. Here’s a look at the top five short squeeze candidates for the week of July 25.
ToughBuilt Industries: Home improvement and construction product company ToughBuilt Industries TBLT tops the short squeeze leaderboard for the week. Data shows 132.1% of the float short and a cost to borrow of 248.9%. Shares of the company went from $3 to $9 last week and could see short interest continue to rise with the recent increase in the share price.
Blue Hat Interactive: Augmented reality company Blue Hat Interactive BHAT creates toys, media and mobile games using its technology. Data shows 40.6% of the company’s float short and a 332.8% cost to borrow, one of the highest figures for the week.
Hour Loop Inc: Ecommerce company Hour Loop Inc HOUR ranks fourth on the short squeeze leaderboard for the week. Fintel data shows 24.4% of the float short and a cost to borrow of 58.6%.
Pennsylvania Real Estate Investment Trust: Mall owner and operator Pennsylvania Real Estate Investment Trust PEI ranks fourth on the list for the week. The company has trended in the top five in recent weeks. Fintel data shows 24.6% of the float short and a cost to borrow of 9.5%.
Chicken Soup for the Soul Entertainment: Video-on-demand company Chicken Soup for the Soul Entertainment CSSE has been a frequent stock in the top ten of the Fintel Short Squeeze Leaderboard. The stock ranks fifth heading into the new week, with 21.0% of the float short and a cost to borrow of 48.7%.
Stocks to Watch: Software company MicroStrategy Inc MSTR ranks sixth for the week, moving up five positions. The company, which is a large holder of Bitcoin BTC/USD, has been a popular short candidate for those believing the price of the leading cryptocurrency will keep falling. The stock has moved up the leaderboard in recent weeks.
EvoFem Biosciences EVFM, a company that has contraceptive products, moved up 16 places to 14th place on the leaderboard. Data shows 57.4% of the float short and a cost to borrow of 126.3%.
Arts and crafts retailer Joann Inc JOAN ranks 16th on the leaderboard, moving up 20 positions. Data shows 30.5% of the float short and a cost to borrow of 25.4%.
The Singing Machine Company MICS, which previously topped the leaderboard for several weeks, fell 10 positions to 11th place. Data shows 31.0% of the float short and a cost to borrow of 113.1%.
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