Short squeezes have been among the most popular and controversial topics on Wall Street in the past couple of years. In 2021, groups of online stock traders on Reddit made headlines by orchestrating targeted buying campaigns to trigger short squeezes in some of the market’s most heavily shorted stocks. 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.
[Sign up for stock news with our Invested newsletter.]
Here are nine stocks primed for the next big short squeezes, according to Ortex Analytics:
| Stock | Short Interest as of Sept. 1 | Cost to Borrow* |
| Velo3D Inc. (ticker: VLD) | 14.7% | 26.0% |
| Fisker Inc. (FSR) | 43.1% | 27.7% |
| Cipher Mining Inc. (CIFR) | 26.7% | 33.7% |
| Hyzon Motors Inc. (HYZN) | 14.9% | 61.9% |
| Beyond Meat Inc. (BYND) | 37.2% | 47.5% |
| AirSculpt Technologies Inc. (AIRS) | 22.8% | 16.1% |
| Invitae Corp. (NVTA) | 21.1% | 23.4% |
| Prime Medicine Inc. (PRME) | 15.1% | 14.5% |
| SmileDirectClub Inc. (SDC) | 22.7% | 13.3% |
*A high borrowing cost is an indicator of high short-seller demand
Velo3D Inc. (VLD)
Velo3D is a 3D printing company that went public via a special purpose acquisition company, or SPAC, merger in September 2021 at around $8.80 per share, and it has since dropped to below $1.60. Velo3D reported 28% revenue growth and record new customer demand in the second quarter. However, short sellers likely focused on the company’s full-year revenue guidance cut and $23 million net loss compared to a net profit of $128 million a year ago. A surprise profit could trigger a sizable short squeeze for Velo3D. Ortex estimates about 15% of Velo3D’s float is held in short positions.
Fisker Inc. (FSR)
Fisker is one of many electric vehicle stocks that short sellers have successfully targeted in recent years. Fisker went public via SPAC merger in October 2020 at a price of around $9. After trading as high as $31.96 during the peak of the Reddit trading craze in early 2021, Fisker shares have dropped all the way back down to the $6 range. The stock took a hit in December 2022 after short seller Fuzzy Panda Research said Fisker is facing liquidity issues, claims Fisker subsequently denied. Fisker’s short interest is up to 43% of its float, highest on this list.
Cipher Mining Inc. (CIFR)
Cipher Mining operates a U.S. Bitcoin (BTC) mining business. Bitcoin prices are up more than 50% so far in 2023, so it’s easy to understand why Cipher shares are skyrocketing. However, short sellers likely see the stock’s incredible 350% year-to-date gain as overkill and are betting on a significant pullback. Cipher reported a $12.7 million net loss in the second quarter, and the stock trades at a steep valuation of more than 13 times sales. However, another significant rise in Bitcoin prices could send short sellers running for the hills. Cipher’s short interest is more than 26% of its float.
Hyzon Motors Inc. (HYZN)
Hyzon Motors is a hydrogen mobility company focused on designing, developing and producing standalone and integrated hydrogen fuel cells and systems, as well as hydrogen-powered commercial vehicles. Hyzon went public via a SPAC merger in July 2021 at a price of $9.70, but it has since dropped more than 85%. In June, Hyzon said it had strengthened its governance and identified “material weaknesses in controls and procedures.” In August, Hyzon reported a second-quarter net loss of $60.2 million. Meanwhile, the stock’s short interest is up to 14% of its float.
[SEE: 15 Best Dividend Stocks to Buy Now]
Beyond Meat Inc. (BYND)
Plant-based meat company Beyond Meat has had a disastrous couple of years, and 2023 is no exception. Beyond reported a 30.5% year-over-year drop in revenue in the second quarter, its fourth consecutive quarter of double-digit sales declines. The stock is down 91% overall in the past three years, and short sellers smell blood in the water. Beyond Meat investors were once betting on a growth stock with a massive addressable market, but short sellers see an unprofitable company with negative growth in an increasingly competitive market. Beyond Meat’s short interest is over 37% of its float.
AirSculpt Technologies Inc. (AIRS)
AirSculpt Technologies provides next-generation body contouring treatments that use a minimally invasive procedure to remove fat, tighten skin and reshape targeted areas of the body. AirSculpt went public in October 2021 at an IPO price of $11 per share, and the stock remains well below its IPO price. In August, AirSculpt reported second-quarter revenue of $55.7 million, up 12.2% from a year ago. The company also reiterated full-year revenue guidance of between $187 million and $192 million. The stock is up 111% year to date, but short sellers aren’t buying the rally. AirSculpt’s short interest is nearly 23% of its float.
Invitae Corp. (NVTA)
Invitae provides advanced genetic testing and actionable DNA-based insights that can be integrated into medical practices. The stock is down more than 97% in the past three years as the company has failed to demonstrate it can turn around its struggling business. Revenue was down 12% year over year in the second quarter, and Invitae reported yet another $206.5 million net loss. In addition, Invitae recently announced a debt exchange agreement that will issue 15.8 million new shares of stock. Falling revenue, net losses and shareholder dilution are a bad combination. Invitae’s short interest is over 21% of its float.
Prime Medicine Inc. (PRME)
Prime Medicine is one of the few companies that went public in a difficult market in 2022. Prime Medicine is developing its gene-editing technology, Prime Editing, to treat a wide range of genetic diseases. Earlier this year, Prime nominated PM359 as its first development candidate for treating chronic granulomatous disease, or CGD. It also reported data demonstrating the potential of its PASSIGE platform to produce multiplex-edited CAR-T cells, suggesting Prime Editing could be used to treat cancers and immune diseases. Short sellers are seemingly skeptical about the company’s technology. Prime Medicine’s short interest is 15% 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. SmileDirectClub 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 four years later it is now down more than 99% to less than 50 cents and is at serious risk of being delisted from the Nasdaq. Meanwhile, SmileDirectClub has still not reported a single profitable quarter as a public company. Ortex estimates more than 22% of SmileDirectClub’s float is held in short positions.
More from U.S. News
10 of the Best Stocks to Buy for 2023
9 Highest Dividend-Paying Stocks in the S&P 500
The Rule of 72: How to Double Your Money in 7 Years
9 Short Squeeze Stocks That Could Take Off in September originally appeared on usnews.com
Update 09/06/23: This story was previously published at an earlier date and has been updated with new information.
