Potential short squeeze plays have gained steam in 2021 with new retail traders looking for the next GameStop Corp (NYSE: GME) and AMC Entertainment Holdings Inc (NYSE: AMC), two stocks that attracted strong interest and saw shares spike.
A short squeeze can occur when a heavily shorted stock rises in value instead of falling. Short sellers could be looking to close out their position and can face a loss if they have to buy back the shares they initially borrowed at a higher price.
Fintel Data: Data from Fintel, which requires a subscription, provides a look at some of the top shorted stocks and data that shows how likely a short squeeze is to happen.
Here is a look at Fintel’s top five short squeeze candidates for the week of Sept. 20.
1. Vinco Ventures: No stranger to the list of short squeeze candidates is Vinco Ventures (NASDAQ: BBIG). The company has topped the list in the past and came in third place in last week’s Fintel list.
The popular retail stock has short interest of 33% and a borrow rate of 48.9%. Fintel reports that 53 institutions opened new positions in BBIG in the last quarter. “Short sellers could see a sad end to this story,” Fintel predicts.
2. Aterian: Consumer products company Aterian Inc (NASDAQ: ATER) is second on Fintel’s list for the second straight week. Fintel shows 36.1% of Aterian’s float short and a borrow fee of 100.1%. Last week had a borrow fee of 86%. Short interest has been climbing in the company going from 4.38 million shares in mid-July to 6.68 million shares short last week.
Shares of Aterian spiked up at the start of last week hitting over $20. Shares are trading at $10.42 at the time of writing, down from last week’s highs but up from $3 seen at the end of August.
3. Bit Mining: Cryptocurrency mining company Bit Mining Ltd – ADR (NYSE: BTCM) moves up from fifth place last week to third place this week. A reported 18.7% of the company’s float is short, in line with last week’s figure. The company once again has one of the highest borrow fees with this week starting at 142%, down slightly from last week’s 155%.
Bit Mining mines Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) and often moves in relation to the price of the top two cryptocurrencies.
4. Katapult Holdings: Buy-now-pay-later company Katapult Holdings (NASDAQ: KPLT) hits the Fintel short squeeze list for the first time at the fourth position. The company has 15.7% of its float short and a borrow fee of 36.7%.
Katapult, which went public via SPAC merger, saw shares drop from $10 to a low of $3.10 in mid-August. Shares more than doubled over the last few weeks briefly nearing the $8 level. Fintel questions the likelihood of a squeeze happening with Katapult filing to sell shares via a secondary offering.
5. Sphere 3D Corp: Data management company Sphere 3D Corp (NASDAQ: ANY) rounds out the list with a short interest of 8.8% of the float and a borrow fee of 39.7%. The popular retail stock has seen short interest more than double from 623,000 shares in June to 1.26 million shares recently.
ANY went from $3.67 to $11.98 over the last month. Last week, shares moved quickly from $5.79 to $7.98 before falling to close out the week.
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