8 Short Squeeze Stocks That Could Take Off in May

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.

Blink Charging Co. (ticker: BLNK)

Blink Charging owns and operates electric vehicle charging equipment. In November 2020, short seller and Citron Research editor Andrew Left called Blink a “total scheme” and a “joke” and said its shares were worth less than $10. In less than eight months, the stock rallied from $2 to as high as $64.50 by January 2021. Blink shares have since traded back down to $20 as EV growth stocks have fallen out of favor. Blink reported impressive 236% revenue growth in 2021, but net losses also tripled. Blink’s short interest has grown to about 32% of its float, or free-trading shares.

Tattooed Chef Inc. (TTCF)

Tattooed Chef is a plant-based food company that went public via a special-purpose acquisition company, or SPAC, merger in 2020, and the company has reported impressive growth numbers. Unfortunately, it’s struggling with profitability, and its sales growth slowed significantly to 32% in the fourth quarter. The stock is down 53.2% 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 another 46% year to date. Tattooed Chef’s short interest is now 34% of its float.

Canoo Inc. (GOEV)

Electric vehicle maker Canoo went public via a SPAC merger in December 2020. At the time, the stock was trading at $22.80. 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 WallStreetBets community. In fact, its stock price surged nearly 50% in November 2021. Canoo shares are now back down to around $5, but its short interest has risen to about 35% 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. The stock is now down more than 90% from its 2021 highs and has been a home run for short sellers who timed the trade correctly. Short sellers are understandably still skeptical. Arcimoto reported a net loss of $47.6 million in 2021, more than 10 times its $4.4 million in revenue. Ortex estimates about 41% of the company’s float is currently held in short positions.

Beam Global (BEEM)

Yet another EV stock that short sellers have successfully targeted up to this point is renewable energy EV charging specialist Beam Global. Beam’s stock price more than doubled to as high as $75.90 in December 2020 when the company announced Montebello, California, is installing two of Beam’s solar-powered EV charging terminals to power city electric transit vans. Beam also announced it was granted a patent for its UAV ARC drone recharging network. Short sellers have since profited on Beam stock’s slide back down to around $16 per share. Beam’s short interest has grown to about 28% of its float.

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 initial public offering at $14 per share. Like many top IPOs of 2021, Weber is off to a rough start on the public market, and its revenue dropped 8% in the most recent quarter. Traders who shorted the IPO are up big now that the stock is trading under $9, but they could easily get smoked by a Weber short squeeze. Weber’s short interest stands at about 37% of its float.

Sweetgreen Inc. (SG)

Sweetgreen owns and operates a chain of 150 salad restaurants. Sweetgreen made its public market debut in November 2021. After pricing its IPO at $28 per share, the stock initially surged as high as $56.20. In the five months that followed, the volatile stock traded all the way back down below its IPO price. Sweetgreen plans to expand its footprint to 1,000 locations. The company’s revenue was up 51% in 2021, but short sellers likely see its $153 million annual net loss as a red flag. Sweetgreen’s short interest is already up to 11% of its float.

SmileDirectClub Inc. (SDC)

SmileDirectClub has been one of the most heavily shorted stocks in the market since it completed its high-profile IPO in 2019. The dental services provider has been a home run trade for short sellers up to this point. The company went public at a price of $23 per share, but roughly two and a half years later it is now down more than 90% to under $2. SmileDirectClub’s revenue dropped 31.6% in 2021, and it has still not reported a single profitable quarter as a public company. Ortex estimates 27% of SmileDirectClub’s float is held in short positions.

8 short squeeze stocks that could take off in May:

— Blink Charging Co. (BLNK)

— Tattooed Chef Inc. (TTCF)

— Canoo Inc. (GOEV)

— Arcimoto Inc. (FUV)

— Beam Global (BEEM)

— Weber Inc. (WEBR)

— Sweetgreen Inc. (SG)

— SmileDirectClub Inc. (SDC)

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8 Short Squeeze Stocks That Could Take Off in May originally appeared on usnews.com

Update 05/02/22: This story was published at an earlier date and has been updated with new information.

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