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 June 20.
Revlon: Cosmetics company Revlon Inc REV tops the Fintel short squeeze leaderboard for the week. Data shows that 37.3% of shares are short and the stock has a cost to borrow of 171.8%. The company declared bankruptcy last week and has been a popular trading idea for investors with the potential of another company rescuing Revlon and shares being kept from going to $0.
Tuscan Holdings Corp II: SPAC Tuscan Holdings Corp II THCA ranks second for the week. Fintel shows that 54.6% of shares are short and the stock has a cost to borrow of 9.1%. The SPAC is taking Surf Mobility public. Due to several voting deadlines, the SPAC has faced several redemption periods, lowering the float and number of available shares.
Eliem Therapeutics: Biotechnology company Eliem Thearpeutics ELYM ranks third for the week, down one position from last week’s leaderboard. Data shows 36.0% of the company’s float short, in line with last week’s number. The cost to borrow on shares rises slightly from 16.5% to 16.6%.
Weber Inc: Grill and grill accessories company Weber Inc WEBR ranks fourth for the week, gaining 11 positions from the previous week. Data shows 56.2% of the company’s float short, the highest of the top five leaders. The company has a cost to borrow of 50.2%.
TherapeuticsMD: Drug development company TherapeuticsMD TXMD ranks fifth for the week after previously topping the list last week. Data shows 24.2% of the company’s float short, in line with last week. The cost to borrow on shares of 28.1% for the week is significantly down from the 75.9% and 74.1% reported in the last two respective weeks.
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