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 23.
BigBear.ai: End-to-end data analytics company BigBear.ai BBAI tops the short squeeze leaderboard for the week. The company, which went public via SPAC merger, moved up from 540th place on the Fintel short squeeze leaderboard to first place for the week. Fintel reports that 18.4% of the total float is short, with short interest up 63% in the latest report. The cost to borrow shares is 728%, one of the highest reported by Fintel.
An S-1 was filed for BigBear.ai on Monday night which makes the resale of PIPE shares and warrants related to the SPAC merger effective, which could cause shares to sell off the rest of the week with the float increasing and likely short interest dropping.
Meta Materials: Technology platform company Meta Materials MMAT ranks second for the week on the Fintel short squeeze leaderboard. The stock has seen short interest up 12% and the short percentage of the float trending higher. A high cost to borrow of 163.4% likely helps the stock rank so high on the list.
Vertex Energy: Environmental services company Vertex Energy VTNR falls from first place in last week’s leaderboard to third place. Fintel shows 33% of the float short, in line with last week’s figure. The cost to borrow for shares is 38.7%, down from 134% in last week’s report.
Cassava Sciences: Biotechnology company Cassava Sciences SAVA ranks fourth on the short squeeze leaderboard from Fintel for the week. The report shows 31.3% of the total float short and short interest up 10% over the last month. The cost to borrow shares of Cassava Sciences stands at 36.5% to start the week.
Fisker: Electric vehicle company Fisker Inc FSR ranks fifth on the short squeeze leaderboard. Fintel shows 35% of the total float short and a cost to borrow of 38.9%. Fisker shares are down 41% year-to-date.
Disclosure: Author is long FSR shares.
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