These actions are prepared for a short contraction. Short selling gained a lot of attention in 2021. Throughout the…
These actions are prepared for a short contraction.
Short selling garnered a lot of attention in 2021. Throughout the year, groups of social media retail traders successfully orchestrated targeted buy campaigns for some of the world’s most heavily shorted stocks. market for the purpose of chasing short sellers and triggering short sales. tight. Short squeezes are large, short-term spikes in stock prices that occur when a large number of short sellers are forced to hedge or exit their positions by buying stocks. Here are eight stocks that have all the makings to be the next major short squeeze, according to Ortex Analytics.
Support.com Inc. (symbol: SPRT)
Support.com has been on Ortex’s radar since it named the stock short-squeeze candidate in July. In the past two months, Support.com has experienced a massive contraction that has caused the stock to skyrocket by over 900%. Incredibly, Support.com’s shortening might just be starting. On September 10, Support.com will conduct a shareholder vote to approve a reverse merger with Bitcoin transaction processor Greenidge Generation Holdings. Ortex estimates that 85% of Support.com’s free float, or free-to-trade stock, is held in short positions, the highest percentage of any stock on this list.
Big 5 Sporting Goods Corp. (BGFV)
Big 5 Sporting Goods is a California-based sporting goods retailer. The stock is up more than 2,250% from its March 2020 lows, and short sellers have piled up. Ortex estimates that 72% of the stock’s free float is currently held in short positions, making it an excellent candidate for a short squeeze. In early August, Big 5 reported an impressive 33.4% growth in same-store sales over two years, suggesting the company is now well above its pre-pandemic sales figures. The 5 big investors also receive a dividend of 3.5% while waiting for a possible short squeeze.
Nikola Corp. (NKLA)
EV stocks have been a battleground for short sellers in 2021, and Nikola is one of the most controversial EV stocks of all. On July 29, a federal grand jury indicted Nikola founder Trevor Milton with three counts of criminal fraud for lying to investors. Milton left the company in September 2020 following allegations by short seller Hindenburg Research that Nikola was spreading “an ocean of lies” about his products. Nikola shares have fallen 74% in the past year, but short sellers apparently see more of the downside to come. Nikola’s short interest is 43% of his free float, according to Ortex.
Intercept Pharmaceuticals Inc. (ICPT)
Intercept Pharmaceuticals is a biopharmaceutical company developing a potential treatment for chronic liver disease. Interception shares have fallen 45% since the start of the year, and rival companies trying to treat non-alcoholic steatohepatitis have also struggled. In May, Cantor Fitzgerald said that “the biology of NASH is complex and still poorly understood.” Short sellers are betting that an Intercept breakthrough is a long plan, and so far they have made a huge profit betting against the action. Intercept’s short-term interest was only 17.5% of its free float in mid-July, but that figure has now reached 40%.
Chef Tatoué Inc. (TTCF)
Tattooed Chef is a plant-based food company that went public through a merger of special purpose acquisition companies in mid-2020. The company posted 45.9% revenue growth in the second quarter, but shares of Tattooed Chef are down 6% year-to-date in 2021 as the company struggles with profitability. The shares of Tattooed Chef came to life in the last week of August, along with several other heavily exposed stocks. According to Ortex, the latest bounce could be the start of a major short squeeze. Tattooed Chef’s short-term interest has fallen from just 6.2% of its free float in mid-February to 38% today.
Workhorse Group Inc. (WKHS)
Workhorse is another electric vehicle stock that has suffered tremendously. The stock is down 52% year-to-date. Much of the sale happened after the US Postal Service chose Oshkosh Corp. (OSK) rather than Workhorse for a $ 6 billion next-generation delivery vehicle contract. Workhorse has since continued the contract. In July, CEO Duane Hughes left the company. Workhorse also withdrew its guidelines and said it was redesigning its vehicles based on customer feedback. Short sellers see blood in the water, but any positive news could trigger a short press. Workhorse’s short interest is 38% of its free float.
Blink Charging Co. (BLNK)
Blink Charging owns and operates charging equipment for electric vehicles. After a big rally in 2020, Blink shares fell 12% in 2021. Blink caught the attention of short sellers when Citron Research editor and prominent short seller Andrew Left called it Blink of “total plan” and “joke” in November. Since Left made its bearish thesis public, Blink’s short-term interest has grown from around 12.7% of its free float to 37% of its free float, according to Ortex. If EV stocks do get hot again at some point, Blink has shown that they have the potential for short-term volatility.
Prélude Thérapeutique Inc. (PRLD)
Prelude Therapeutics is an early-stage clinical biotechnology company developing the cancer treatment drugs PRT543 and PRT811, which are currently in clinical trials. Short squeezes often need a catalyst to put pressure on short sellers. Prelude could have several bullish catalysts ahead as management expects additional data on PRT543 and PRT811 before year end. Bank of America upgraded Prelude in July and is optimistic about the company’s differentiated treatment approach and its potential to treat multiple types of cancer. Ortex estimates that 36% of the company’s free float is currently held in short positions.
Short squeeze stocks that could take off in September:
– Support.com Inc. (SPRT)
– Big 5 Sporting Goods Corp. (BGFV)
– Nikola Corp. (NKLA)
– Intercept Pharmaceuticals Inc. (ICPT)
– Tattooed Chef Inc. (TTCF)
– Workhorse Group Inc. (WKHS)
– Blink Charging Co. (BLNK)
– Prelude Therapeutics Inc. (PRLD)
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8 short-term stocks that could take off in September originally appeared on usnews.com