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 higher on many occasions.
Fintel Data: Data from Fintel, which requires a subscription, provides a look at several of the top shorted stocks and data on how likely a short squeeze is to occur.
Here’s a look at Fintel’s top five short squeeze candidates for the week of May 2.
Aterian: No stranger to the short squeeze leaderboard, consumer products company Aterian Inc ATER tops the list once again. Fintel shows 36.9% of the float short, up from last week’s 34.8%. The cost to borrow shares sits at 124.9%, in line with last week’s total.
Harbor Custom Development: Real estate development company Harbor Custom Development Inc HCDI ranks second on the short squeeze leaderboard for the second straight week. Fintel shows 23.9% of the total float short and a cost to borrow of 65.9%. The stock saw 26.6% of the float short last week and a cost to borrow of 37.6%.
Zymeworks: Biopharmaceutical company Zymeworks Inc ZYME ranks third for the week on the short squeeze leaderboard. Fintel data shows 15.9% of the total float short and a cost to borrow of 54.6%. The company was subject to a $10.50 buyout offer last week, which sent shares higher.
Lixte Biotechnology Holdings: Biotechnology company Lixte Biotech Holdings Inc LIXT shot up from the $1 level to nearly $5 to hit new 52-week highs last week. The company makes the short squeeze leaderboard with 23.7% of its total float short and an elevated cost to borrow of 94.7%. Short interest in the company was up 11,000% in the latest monthly report.
Veru: Shares of biopharmaceutical company Veru Inc VERU have gone from $4.50 to over $17 in the last month. Shares hit a 52-week high of $17.50 in mid-April. The company joins the Fintel short squeeze leaderboard with 21% of the float short. The company has a lower cost to borrow of 12.1%, which could be the key figure to watch to see if a squeeze is more likely to happen. Short interest in the stock was up 236% in the last monthly report and could come in higher when the new figures are released given the recent sharp increase in the share price.
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