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 on how likely a short squeeze is to occur.
Here’s a look at Fintel’s top five short squeeze candidates for the week of Feb. 14.
Aridis Pharmaceuticals: Biopharmaceutical company Aridis Pharmaceuticals Inc (NASDAQ:ARDS) tops the short squeeze leaderboard for the week with a score of 99.42. Fintel shows 29% of the total float short and raw short interest up 1,900% in the last four weeks. The cost to borrow on ARDS shares is 105%.
High short interest and a high cost to borrow give the stock two of the key elements needed for a short squeeze.
Vinco Ventures: Consumer products and digital marketing company Vinco Ventures Inc (NASDAQ:BBIG) remains as the only carryover from last week. Fintel shows 31% of the total float short with raw short interest up 16% from the prior report and up 40% in the last month. The cost to borrow on BBIG shares is 103%.
Fintel shows institutional investors turning bullish on shares with an increase in ownership and average portfolio allocation.
Indonesia Energy Corp: Oil and gas exploration company Indonesia Energy Corp (NYSE:INDO) ranks third on the short squeeze leaderboard for the week. Raw short interest has increased 4,900% in INDO shares over the last month. Fintel shows 14.5% of the total float short and a cost to borrow of 127%.
Shares have increased significantly recently with an update on drilling projects in 2022. Short interest could increase in the stock with people betting against the sharp increase in shares.
EVgo: Charging infrastructure company EVgo Inc (NASDAQ:EVGO), which went public via SPAC merger, is the latest former SPAC to join the short squeeze leaderboard. Short interest has risen in the stock over the last month. Fintel shows 22.2 million shares short, representing 32% of the total float. Shares have a cost to borrow of 63%.
Blink Charging: Electric vehicle charging company Blink Charging Co (NASDAQ:BLNK) comes in fifth in this week’s short squeeze leaderboard. Fintel shows 41% of the total float short, among the highest for the week. The cost to borrow on BLNK shares is 51.8%.
