These stocks have the right conditions to trigger short squeezes.
Short squeezes have been among the most popular and controversial topics on Wall Street in the past year or so. In early 2021, groups of online stock traders on Reddit began orchestrating targeted buying campaigns in some of the market’s most heavily shorted stocks in an attempt to trigger short squeezes. A short squeeze is a large, short-term spike in a stock’s share price that occurs when a significant number of short sellers are forced to buy shares and exit their positions all at once. Here are eight stocks primed for the next big short squeezes, according to Ortex Analytics.
Tattooed Chef Inc. (ticker: TTCF)
Tattooed Chef is a plant-based food company that went public via special-purpose acquisition company merger in 2020, and the company has reported impressive growth numbers. Unfortunately, it’s struggling with profitability, and its year-over-year sales growth slowed significantly from 43.5% in the third quarter to 32.2% in the fourth quarter. The stock is down more than 35% in the past year, but any meaningful progress toward profitability could be enough to send short sellers running and trigger a major short squeeze. Tattooed Chef’s short interest has remained elevated in 2022, while the stock has fallen by about 20% this year. Tattooed Chef’s short interest is about 35% of its float, or free-trading shares.
Joann Inc. (JOAN)
Joann is an omnichannel arts and crafts retailer that operates about 850 stores in the U.S. The company went public in March 2021, selling initial public offering shares at $12. After a volatile year of trading, JOAN shares have made very little progress overall and closed at $11.11 on April 1. The company reported a 12.4% decline in same-store sales in the fourth quarter. Short sellers have routinely targeted IPO and SPAC merger stocks since the beginning of 2021. Joann’s short interest is about 29% of its float, making it a strong short squeeze candidate.
Weber Inc. (WEBR)
Weber is a leading brand in outdoor cooking products, including charcoal grills, gas grills, electric grills, smart grills and smokers. The company went public in August 2021, pricing its IPO at $14 per share. Like many top IPOs of 2021, Weber is off to a lackluster start on the public market, and its year-over-year revenue dropped 8% in the quarter ending Dec. 31, 2021. Traders who shorted the IPO are up big now that the stock is trading for about $10 per share, but they could easily get smoked by a Weber short squeeze. Weber’s short interest stands at about 50% of its float.
Canoo Inc. (GOEV)
Electric vehicle maker Canoo went public via a SPAC merger in December 2020. At the time, the stock started trading at $22.82. In May 2021, the company disclosed an investigation by the U.S. Securities and Exchange Commission following several executive departures. Short sellers piled into the stock, but Canoo demonstrated its short squeeze potential when it gained popularity in Reddit’s popular WallStreetBets community and its stock price surged more than 60% in November 2021. The stock has fallen back down to close at $5.43 on April 1, but its short interest has risen to about 29% of its float.
Blink Charging Co. (BLNK)
Blink Charging owns and operates EV charging equipment. In November 2020, short seller and Citron Research editor Andrew Left called Blink a “total scheme” and a “joke” and said shares were worth less than $10. At the time, the stock had rallied from $2 to about $28 in a matter of months, and momentum ultimately pushed Blink shares to close at $60.72 on Jan. 26, 2021. The stock has since traded back down to less than $30. Blink reported impressive 236% revenue growth in 2021, but net losses also more than tripled from 2020. Blink’s short interest has grown to about 34% of its float.
EVgo Inc. (EVGO)
EVgo is another EV-charging technology company that short sellers have targeted. EVgo went public via a SPAC merger in July 2021, and its shares opened at about $15 following the merger. In November 2021, Bank of America analyst Ryan Greenwald downgraded EVgo to “underperform” and said the stock was benefiting from “charging euphoria” among traders, which had overly inflated the company’s share price. Greenwald set an $11 price target, and the stock has since traded down to close at $12.75 on April 1. Short sellers agree with the bearish thesis, and EVgo’s short interest now stands at about 31% of its float.
Arcimoto Inc. (FUV)
Continuing with the EV stock theme, Arcimoto designs and develops three-wheeled EVs. After gaining more than 720% in 2020, Arcimoto shares have come back down to earth in the past year or so. The stock is now down more than 80% from its 2021 highs and has been a home run for short sellers who timed the trade correctly. Arcimoto has the smallest float on this list at just 28.8 million shares, creating the possibility for an extremely volatile short squeeze. Ortex estimates that about 41% of the company’s float is currently held in short positions.
Vicarious Surgical Inc. (RBOT)
Vicarious Surgical is a technology company focused on surgical robotics. Vicarius went public in September 2021 via SPAC merger and is yet another example of the dozens of SPAC and IPO stocks that have struggled in recent months. In fact, Vicarious shares have fallen about 60% since its SPAC merger, which was only about six months ago. However, short seller profits could evaporate quickly if Vicarious gets caught in a short squeeze. RBOT’s short interest stands at only about 8% of its float, but Ortex reports its cost-to-borrow and share-utilization rate remain extremely high.
8 short squeeze stocks that could take off in April:
— Tattooed Chef Inc. (TTCF)
— Joann Inc. (JOAN)
— Weber Inc. (WEBR)
— Canoo Inc. (GOEV)
— Blink Charging Co. (BLNK)
— EVgo Inc. (EVGO)
— Arcimoto Inc. (FUV)
— Vicarious Surgical Inc. (RBOT)
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8 Short Squeeze Stocks That Could Take Off in April originally appeared on usnews.com
Update 04/04/22: This story was published at an earlier date and has been updated with new information.
