Recent economic data, including the cooling labor market and slowing service sector, and a string of bank collapses are raising the odds of a recession. Amid a challenging macro environment, investors should stay away from risky stocks Shift4 Payments, Inc. (FOUR), ChargePoint Holdings, Inc. (CHPT), and WeWork Inc. (WE), which possess a relatively high short interest.
Generally, short interest as a percentage of float above 10% indicates a pessimistic sentiment surrounding the stock. It also heightens the probability of a short squeeze, which leads to unexpected price increases.
