Last week, members of the Reddit forum WallStreetBets were able to pull off a short squeeze for the history books by banding together to take on hedge funds betting against GameStop Corp. GME.
Targeting GameStop worked well for the Reddit community because GameStop had very high short interest — over 130% at the time — and has a relatively small float of 51 million. However, the short squeeze was big trouble for Melvin Capital, which was forced to close out its entire GameStop short position for a loss. Afterward Melvin Capital required Citadel and Point72 to inject $3 billion into its fund to bolster its finances.
The retail trading community is targeting stocks with the highest percentage of short interest to force institutions to cover their positions, which helps drive the share price dramatically higher. Small retail investors, large hedge funds and financial institutions may be wondering what stock they’ll successfully target next.
Below are the next 10 most heavily shorted stocks on the Russell 3000 as of Jan. 29, 2021:
- Accelerate Diagnostics Inc. AXDX: Market cap of $600 million with 31.03 total share float and 45% short.
- Academy Sports and Outdoors Inc ASO: Market cap of $1.9 billion with 21.07 million total share float and 45% short.
- AMC Entertainment Holdings AMC: Market cap of $2 billion with 56.56 million total float and 58% short.
- Bed Bath & Beyond BBBY: Market cap of $4.3 billion with 230.80 million total float and 63% short.
- Ligand Pharmaceuticals Inc. LGND: Market cap of $3 billion with 15.34 million total float and 65% short.
- Macerich Co MAC: Market cap of $2.3 billion with 137.99 total share float and 57% short.
- National Beverage Corp FIZZ: Market cap of $7.1 billion with 11.64 million total float and 63% short.
- SunPower Corporation SPWR: Market cap of $9.2 billion with 80.91 million total float and 57% short.
- Tanger Factory Outlet Centers Inc. SKT: Market cap of $1.4 billion with 90.15 total share float and 57% short.
- Tootsie Roll Industries, Inc. TR: Market cap of $2.6 billion with 16.11 million share float and 46% short.
- (Photo by Giorgio Trovato on Unsplash)
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