Potential short squeeze plays gained steam in 2021, with new retail traders looking for the next huge move.
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.
A squeeze can occur when short sellers are forced into buying to cover their position, which can cause shares to go much higher on many occasions.
Fintel Data: Data from Fintel, which requires a subscription, provides a look at several of the top shorted stocks and data showing how likely a short squeeze is to occur.
Here’s a look at Fintel’s top five short squeeze candidates for the week of Jan. 31.
TSR Inc: Computer programming services company TSR Inc (NASDAQ:TSRI) tops the Fintel short squeeze leaderboard for the week. Short interest stands at 54.9% of the company’s float, according to the report. Short interest is 357,000 shares, significantly elevated from the last month. The cost to borrow on shares stands at 103%, which could make the company ripe for a squeeze.
Vinco Ventures: Not a stranger to the short squeeze leaderboard, Vinco Ventures Inc (NASDAQ:BBIG) rejoins the leaderboard. The consumer products and digital marketing company merged with TikTok rival Lomotif. Fintel shows 27% of BBIG’s float short. The cost to borrow on shares is 89%.
Related Link: Fintech OppFi Gets SPAC Deal From Former TD Ameritrade CEO
SmileDirectClub: Orthodontics company SmileDirectClub (NASDAQ:SDC) ranks third on the short squeeze leaderboard. Fintel shows 30% of the company’s float short and a cost to borrow of 32%. Fintel shows institutional fund flows in the stock negative with owners declining and allocations declining as well.
Kidpik Corp: E-commerce company Kidpik Corp (NASDAQ:PIK) joins the short squeeze leaderboard for the week. Fintel shows 69% of the float short and a cost to borrow of 199%, both among the highest for the week.
The stock would have ranked first on the leaderboard if not for the fact that shares have gone down in value over the last week. Fintel notes that a short squeeze and margin calls are less likely when the share price is going down. If shares increase to start the week, PIK could be a strong target for a short squeeze and receive more social media mentions.
OppFi: Fintech OppFi Inc (NYSE:OPFI), which went public in an $800 million SPAC merger, uses artificial intelligence to target the everyday consumer neglected by mainstream financial services. The company ranks fifth on the leaderboard for the week with 36% of the float short and a borrow fee of 18%. Short interest has been rising with raw short interest standing at 1.75 million shares, up 36% over the last month.
Photo courtesy of SmileDirectClub.
