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 move up 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 Mar. 7.
Kaival Brands: For the second straight week, vaping device distributor Kaival Brands Innovation Group (NASDAQ:KAVL) tops the list. Fintel shows that 30% of the float is short, with short interest up 681% in the latest report. The cost to borrow on Kaival Brands shares is 228%. Last week, Kaival Brands had a cost to borrow of 409%, one of the highest on record. Despite the drop in cost to borrow, 228% still marks one of the highest figures of all time.
MDJM: Real estate service company MDJM (NASDAQ:MDJH) ranks second on the short squeeze leaderboard for a second straight week. Fintel shows 28.9% of the float short and a cost to borrow of 155%. The cost to borrow on shares last week was 145%, marking a slight rise in this key figure for determining the likelihood for a short squeeze to occur.
Related Link: Indoor Farming Startup AppHarvest Aims For Wall Street With SPAC Deal
AppHarvest: Indoor farming company AppHarvest (NASDAQ:APPH) ranks third on the short squeeze leaderboard for the week. Fintel shows 23% of the float short and a cost to borrow shares of 60%. The high short interest and high cost to borrow come on the heels of shares trading higher last week, with agriculture stocks moving up on the geopolitical climate.
Arcimoto: Three-wheeled electric vehicle company Arcimoto Inc (NASDAQ:FUV) ranks fourth on the leaderboard for the week. Fintel shows 37.3% of the float short, with raw short interest rising. The cost to borrow at 16.2% is among the lowest, but could be worth watching if it elevates higher.
Ion Geophysical Corp: Technology and services company Ion Geophysical Corp (NYSE:IO) ranks fifth for the week with 14.1% of the float short and a cost to borrow of 46.2%. The company provides services and solutions for the oil and gas industry, which has seen renewed interest from investors with the rising cost of oil worldwide due to the Russia-Ukraine conflict.
