Potential short squeeze plays gained steam in 2021 and continued through 2022, 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, provided 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 Aug. 1.
ToughBuilt Industries: Home improvement and construction product company ToughBuilt Industries Inc TBLT topped the short squeeze leaderboard for the second straight week. Data showed 30.0% of the float short and a cost to borrow of 226.1%. Both figures were down from last week but came as the shares went from $3 to $9 two weeks ago.
Hour Loop: E-commerce company Hour Loop Inc HOUR moved up one position from third place to second place for this week’s short squeeze leaderboard. Data showed 21.1% of the float short and a cost to borrow of 56.8%. The figures were down from last week’s 24.4% and 58.6%, respectively.
Solo Brands: Direct-to-consumer company Solo Brands Inc DTC ranked third on the leaderboard. The maker of Solo Stove, Our, ISLE and Chubbies apparel had 21.3% of its float short and a cost to borrow of 9.4%, according to the latest report.
NextNav: GPS service provider NextNav Inc NN ranked fourth on the leaderboard with 37.2% of the float short and a cost to borrow of 21.6%.
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Indonesia Energy: Oil and gas exploration company Indonesia Energy Crop Ltd INDO returned to the leaderboard after being a frequent stock listed as a short squeeze candidate. Data showed 21.1% of the float short and a cost to borrow of 155.5%, one of the highest costs to borrow of the week. The stock trades at around $6 and has traded between $2.61 to $86.99 over the past 52 weeks with heavy trading activity related to oil stocks and short squeeze candidates.
Stocks to Watch: A look outside the top five candidates showed several other short squeeze candidates and companies that could soar up the leaderboard.
CompoSecure CMPO ranked sixth, gaining 18 places. Data showed 41.4%% of the float short and a cost to borrow of 10.9%.
Chicken Soup for the Soul Entertainment CSSE fell out of the top five from last week, ranking seventh for the week. Data showed 20.3% of the float short and a cost to borrow of 39.5%.
Beam Global BEEM rose 34 places to rank eighth for the week. The stock had 22.1% of its float short and a cost to borrow of 47.3%.
Sundial Growers Inc SNDL was one of the biggest gainers of the week, rising 2,933 positions to 14th place on the leaderboard. Data from Fintel showed 98.5% of the float short and a cost to borrow of 3.9%.
Redbox Entertainment Inc RDBX, which had previously been in the top five, jumped 10 places to 17. Data showed 63.7% of the float short and a cost to borrow of 909.0%.
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