Potential short squeeze plays have gained steam in 2021 with new retail traders looking for the next GameStop Corp GME and AMC Entertainment Holdings Inc AMC, two stocks that attracted strong interest and saw shares spike.
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.
Fintel Data: Data from Fintel, which requires a subscription, provides a look at some of the top shorted stocks and data that shows how likely a short squeeze is to happen.
Here is a look at Fintel’s top five short squeeze candidates for the week of Sept. 20.
1. Vinco Ventures: No stranger to the list of short squeeze candidates is Vinco Ventures BBIG. The company has topped the list in the past and came in third place in last week’s Fintel list.
The popular retail stock has short interest of 33% and a borrow rate of 48.9%. Fintel reports that 53 institutions opened new positions in BBIG in the last quarter. “Short sellers could see a sad end to this story,” Fintel predicts.
2. Aterian: Consumer products company Aterian Inc ATER is second on Fintel’s list for the second straight week. Fintel shows 36.1% of Aterian’s float short and a borrow fee of 100.1%. Last week had a borrow fee of 86%. Short interest has been climbing in the company going from 4.38 million shares in mid-July to 6.68 million shares short last week.
Shares of Aterian spiked up at the start of last week hitting over $20. Shares are trading at $10.42 at the time of writing, down from last week’s highs but up from $3 seen at the end of August.
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3. Bit Mining: Cryptocurrency mining company Bit Mining Ltd – ADR BTCM moves up from fifth place last week to third place this week. A reported 18.7% of the company’s float is short, in line with last week’s figure. The company once again has one of the highest borrow fees with this week starting at 142%, down slightly from last week’s 155%.
Bit Mining mines Bitcoin BTC/USD and Ethereum ETH/USD and often moves in relation to the price of the top two cryptocurrencies.
4. Katapult Holdings: Buy-now-pay-later company Katapult Holdings KPLT hits the Fintel short squeeze list for the first time at the fourth position. The company has 15.7% of its float short and a borrow fee of 36.7%.
Katapult, which went public via SPAC merger, saw shares drop from $10 to a low of $3.10 in mid-August. Shares more than doubled over the last few weeks briefly nearing the $8 level. Fintel questions the likelihood of a squeeze happening with Katapult filing to sell shares via a secondary offering.
5. Sphere 3D Corp: Data management company Sphere 3D Corp ANY rounds out the list with a short interest of 8.8% of the float and a borrow fee of 39.7%. The popular retail stock has seen short interest more than double from 623,000 shares in June to 1.26 million shares recently.
ANY went from $3.67 to $11.98 over the last month. Last week, shares moved quickly from $5.79 to $7.98 before falling to close out the week.
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