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Stone Energy The Latest Low-Float, Heavily-Shorted Stock To Blow The Roof Off The Market

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Stone Energy The Latest Low-Float, Heavily-Shorted Stock To Blow The Roof Off The Market
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Stone Energy Corporation (NYSE: SGY) shares are trading higher by 300 percent on Wednesday after the company reported it has completed its financial restructuring.

After a previous 10-to-1 reverse split in summer of 2016, the new restructuring will effectively result in another 5.67-to-1 reverse split for Stone shareholders.

The stock was subsequently upgraded to Buy by National Securities.

While those two headlines are certainly good fundamental news for Stone Energy shareholders, there’s likely more at play behind the company quadrupling its market cap overnight.

Back in January, Benzinga reported on the explosive potential that stocks with high short interest and a low float can have.

DryShips Inc. (NASDAQ: DRYS) is a prime example of the power of the high short/low float combo. DryShips shares jumped from under $4 to above $100 then below $10 within a matter of days back in November. Like Stone Energy, DryShips' float was drastially reduced via a series of reverse stock splits. EnteroMedics Inc (NASDAQ: ETRM), another low float/high short stock, skyrocketed more than 1,320 percent in the first six trading days of 2017 to as high as $30.41. Today, the stock is back down below $6.30.

Related Link: Low-Float, Heavily-Shorted Stocks Are The Volatility Play Right Now

In January, Benzinga identified Stone Energy as one of the six stocks with the most explosive upside potential due to its elevated short interest of 44.8 percent and its minuscule float of only 4.5 million shares. It took less than two months for Stone Energy to demonstrate that explosive potential, and traders that were in on the move are realizing exceptional gains on Wednesday.

For trades looking for the next epic short squeeze, here’s a look at five other stocks with tiny floats and huge short interest.

  • Helios and Matheson Analytics Inc (NASDAQ: HMNY) – Short interest 83.5 percent; float 354,000
  • Roka Bioscience Inc (NASDAQ: ROKA) - Short interest 27.0 percent; float 919,000.
  • Globus Maritime Ltd (NASDAQ: GLBS) - Short interest 22.0 percent; float 1.33 million.
  • Cesca Therapeutics Inc (NASDAQ: KOOL) - Short interest 29.2 percent; float 1.5 million.
  • Apptio Inc (NASDAQ: APTI) - Short interest 29.6 percent, float 1.83 million.

Posted-In: Low Float Short SqueezeLong Ideas Movers Trading Ideas Best of Benzinga

 

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