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.
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Here are nine stocks primed for the next big short squeezes, according to Ortex Analytics:
| Stock | Short interest as of Dec. 26 | Cost to borrow* |
| Sirius XM Holdings Inc. (ticker: SIRI) | 28% | 60% |
| Lion Electric Co. (LEV) | 17% | 29% |
| RumbleON Inc. (RMBL) | 18% | 43% |
| MicroVision Inc. (MVIS) | 27% | 32% |
| Sientra Inc. (SIEN) | 13% | 68% |
| Beyond Meat Inc. (BYND) | 43% | 216% |
| Luminar Technologies Inc. (LAZR) | 26% | 16% |
| Workhorse Group Inc. (WKHS) | 20% | 29% |
| Mondee Holdings Inc. (MOND) | 17% | 12% |
*A high borrowing cost is an indicator of high short-seller demand.
Sirius XM Holdings Inc. (SIRI)
SiriusXM Holdings is a leading provider of satellite and internet radio services, largely to the auto industry. In December, Liberty Media Corp. announced a deal to combine its majority stake in Sirius XM — represented by its tracking stock group (LSXMA, LSXMB, LSXMK) — with SiriusXM Holdings to form a new public company called New SiriusXM, which will have a single series of common stock under the ticker SIRI. The deal is expected to be completed in the third quarter of 2024. If the stock’s short sellers exit prior to the restructuring, it could trigger a short squeeze. The stock’s short interest is up to 28% of its float, or number of publicly traded shares not held by company insiders.
Lion Electric Co. (LEV)
Lion Electric produces commercial electric vehicles. In July, the company opened a new manufacturing facility in Illinois that will initially produce electric school buses, but it plans to expand production to other types of commercial vehicles over time. Lion went public via a special-purpose acquisition company, or SPAC, merger in May 2021. Its stock initially opened at about $18.50 following the merger, but it has since dropped all the way down to $1.84 as of Dec. 26. If Lion can deliver on its goal to produce 20,000 commercial vehicles per year at its new plant, investors could see a major short squeeze. Ortex estimates about 17% of Lion’s float is held in short positions.
RumbleON Inc. (RMBL)
RumbleON is an e-commerce company, offering a variety of new and used powersports products, as well as accessories and parts. RumbleON went public in 2017 at an initial public offering price of $5.50, and it has been a very lucrative stock for short sellers. The stock has performed so poorly that the company was forced to implement a 1-for-20 reverse stock split in 2020 to maintain Nasdaq compliance. On a split-adjusted basis, RumbleON shares now trade at about 41 cents. Ortex estimates about 18% of RumbleON’s float is held in short positions.
MicroVision Inc. (MVIS)
Microvision is developing a lidar sensor for autonomous vehicles and has been a favorite of Reddit group WallStreetBets since early 2021. After trading as high as $28 during the peak of the Reddit trading craze in April 2021, Microvision shares have dropped back down to close at $2.75 on Dec. 26. Earlier this year, Microvision demonstrated its short squeeze potential, soaring from under $2 to as high as $8.20 in less than six weeks. Short sellers see the company reported just $1 million in revenue and a $23.5 million net loss in the third quarter. The stock’s short interest is up to 27% of its float.
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Sientra Inc. (SIEN)
Sientra is a medical aesthetics company. The company’s product portfolio includes breast implants, its AlloX2 breast tissue expander and its enhanced viability fat transfer system. The company went public in 2014, and short sellers are banking on its horrible performance to continue. The stock’s IPO price was $15 per share, but the stock closed at 62 cents even after completing a 1-for-10 reverse stock split in early 2023. Sientra has a minuscule float of just 11 million shares, making it a potentially extremely volatile short squeeze candidate. The stock’s short interest is up to 13% of its float.
Beyond Meat Inc. (BYND)
Plant-based protein company Beyond Meat has had a disastrous couple of years, and 2023 was no exception. Beyond reported another 8.7% year-over-year drop in revenue in the third quarter after four consecutive quarters of double-digit sales declines. The stock is down 93% 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 43% of its float, the highest on this list.
Luminar Technologies Inc. (LAZR)
Luminar Technologies is another EV technology company that went public via a SPAC merger in December 2020 and has been a massive flop for investors and a huge win for short sellers. On its first day of trading back in 2020, Luminar shares jumped 30% and were trading above $22 per share. The stock has since dropped all the way back down to $3.60. Luminar’s 33% revenue growth in the third quarter suggests the company has potential, but short sellers are focused more on its $134 million net loss in the quarter. Ortex estimates 26% of Luminar’s float is held in short positions, suggesting potential for a short squeeze at some point.
Workhorse Group Inc. (WKHS)
EV stocks have been popular targets for short sellers in the past three years, and Workhorse shares are down a whopping 98% in that time. The U.S. Postal Service chose competitor Oshkosh Corp. (OSK) over Workhorse for a crucial $6 billion next-generation delivery vehicle contract in 2021. Later that year, Workhorse announced it was under investigation by the Securities and Exchange Commission and Department of Justice for accounting fraud, fake vehicle orders and insider trading tied to the USPS contract. Market expectations are now extremely low for Workhorse, so any positive news could ignite a short squeeze. Workhorse’s short interest is 20% of its float.
Mondee Holdings Inc. (MOND)
Mondee is a travel technology app that processes more than 50 million daily searches. In 2023, the company has been focused on integrating artificial intelligence into its services, launching a new AI-powered travel platform in July. Mondee also acquired Skypass Travel in August 2023 as part of its ongoing merger and acquisition strategy. The company is unquestionably putting up some impressive growth numbers, including 35% revenue growth in the third quarter. However, like many other heavily shorted stocks, Mondee’s business is not profitable. Mondee’s short interest is 17% of its float, making it a top short squeeze candidate.
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9 Short Squeeze Stocks That Could Take Off originally appeared on usnews.com
Update 12/27/23: This story was previously published at an earlier date and has been updated with new information.
