Unconfirmed Buyout Rumors Have GNC Shorts Nervous
GNC Holdings Inc (NYSE: GNC) shares are up nearly 3 percent Friday as traders circulate unconfirmed rumors that the company could be a takeover candidate.
Benzinga Pro reports that the source of the rumors has a shaky track record in terms of accuracy, but trading action indicates that some traders seem to be taking the rumors seriously.
While the rumors may not be credible enough to provoke bulls to buy more shares, they may be scary enough to drive shorts to cover some of their positions. According to shortsqueeze.com, GNC currently has an extremely high short percent of float of 33.6 percent. There are currently more than 22.6 million shares held short with 3.0 days to cover.
Related Link: GNC's CEO And Chairman Both Just Bought A Bunch Of Stock
Rumors of a takeover for GNC come just weeks after the company’s CEO Robert Moran and chairman of the board Michael Hines both made large inside purchases of stock. At the time, the stock’s 10 percent move following news of insider purchases demonstrated the type of explosive short squeeze potential GNC shares have.
Since that time, GNC stock has resumed its downward trajectory, dropping another 13.9 percent. Short sellers have been relentlessly piling on as well. Year-to-date, short interest in GNC is already up an incredible 148.1 percent.
As of 11:50 a.m. ET, the stock was trading at $7.61, up 2.3 percent on the day.
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