Meme stocks such as GameStop Corp. GME and AMC Entertainment Holdings Inc AMC showed massive strength this week as retail investors rotated their way into the same stocks that saw the historical short squeeze in 2021.
The threshold for a potential short squeeze is when the high short interest of a stock is 20% or above. Meaning if 20% or more of the outstanding shares of a stock are owned by short-sellers, the underlying stock can be on-ramped to a short squeeze.
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Short-sellers make profits when the price of the asset goes down, borrowing shares from their brokers in hopes to return the shares at a lower price. A short squeeze can occur when the price of an asset goes up, forcing the short-sellers to cover their positions, leading to more losses because buying shares increases the price of the stock.
A great example of this is the aforementioned short squeeze of GameStop. When it was revealed to retail investors 140% of the public float was sold short to hedge funds, it led to billions in losses.
According to Benzinga Pro, short-sellers own more than 20% of these stocks:
(Percentages are the shares in the float sold short.)
- Marketwise Inc MKTW 44.45%
- Weber Inc WEBR 44.42%
- Beyond Meat Inc BYND 40.61%
- Gogo Inc GOGO 39.19%
- Dutch Bros Inc BROS 33.91%
- Canoo Inc GOEV 33.07%
- Fisker Inc FSR 32.96%
- SmileDirectClub Inc SDC 30.86%
- Hycroft Mining Holding Corporation HYMC 30.16%
- Chewy Inc CHWY 28.77%
- Corsair Gaming Inc CRSR 28.55%
- Nikola Corp NKLA 28.46%
- Virgin Galactic Holdings Inc SPCE 25.14%
- Lordstown Motors Corp RIDE 24.02%
- SoFi Technologies Inc SOFI 23.27%
- Bed Bath & Beyond Inc BBBY 21.81%
- AppHarvest Inc APPH 20.92%
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