8 Short Squeeze Stocks That Could Take Off

In 2021, groups of online stock traders on Reddit made headlines by orchestrating targeted buying campaigns to trigger short squeezes in GameStop Corp. (ticker: GME), AMC Entertainment Holdings Inc. (AMC) and other heavily shorted stocks.

Extreme volatility has returned to GameStop in recent weeks after popular trader Keith Gill, also known as Roaring Kitty, returned to social media and disclosed a sizable stake in GameStop after a nearly four-year hiatus from posting. 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’s an updated look at GameStop’s short squeeze potential in 2024 and seven other stocks primed for the next big short squeezes, according to Ortex Analytics:

Stock Short interest as of June 7 Cost to borrow*
GameStop Corp. (GME) 22.5% 4.2%
Pulse Biosciences Inc. (PLSE) 17.2% 183.3%
Torrid Holdings Inc. (CURV) 16.8% 74.1%
Microvast Holdings Inc. (MVST) 16.3% 197.9%
Lucid Group Inc. (LCID) 27.5% 27.7%
Beyond Meat Inc. (BYND) 38.4% 164.7%
ProKidney Corp. (PROK) 22.9% 33.2%
Cassava Sciences Inc. (SAVA) 27.5% 19.8%

*A high borrowing cost is an indicator of high short-seller demand.

GameStop Corp. (GME)

GameStop may have been the original meme stock short squeeze, but GameStop’s situation is far different today than it was when its short interest peaked in January 2021 at about 141% of its float, or free-trading shares not held by institutional investors and company insiders. Today, Ortex reports GameStop’s short interest is still elevated at 22.5% of its float. However, the stock’s utilization — the percentage of shares available for loan that are currently outstanding on loan — is 76.3%. Its cost to borrow is also only 4.2%, far cheaper than any other stock on this list. In other words, GameStop will likely continue to be volatile as social media traders and Wall Street high-frequency trading algorithms digest the company’s earnings numbers, but GameStop doesn’t appear to be the same short squeeze perfect storm in 2024 that it was in 2021.

Pulse Biosciences Inc. (PLSE)

Pulse Biosciences is a health care equipment maker developing a proprietary oncolytic electroceutical therapy based on its proprietary nano-pulse electro-signaling technology. Eight years after Pulse’s 2016 initial public offering, the company is still reporting consistent net losses. Meanwhile, the stock’s share count has nearly quadrupled over the past seven years. Short sellers are seemingly very skeptical of the company’s technology and have piled into the stock. About 17% of Pulse’s float is held by short sellers. However, it is the only stock on this list that has a high 96.3% utilization, making it a potentially volatile short squeeze candidate.

Torrid Holdings Inc. (CURV)

Torrid operates an e-commerce platform that specializes in women’s plus-size apparel and intimates, including tops, denim, activewear, footwear and accessories. Torrid shares have surged about 150% in the past year even as the company has reported four consecutive quarters of negative net income and revenue growth. Even after the recent rally, Torrid shares are still down nearly 70% from their $21 IPO in only about three years. Short sellers seemingly believe the rally will run out of steam, but some surprise growth numbers could ignite a major short squeeze. Ortex estimates 16.8% of Torrid’s float is held in short positions.

Microvast Holdings Inc. (MVST)

Microvast is an advanced battery technology company that designs, develops and manufactures battery components primarily for electric commercial vehicles and utility-scale energy storage systems. At the time Microvast went public via a SPAC merger in July 2021, the stock was trading above $9 per share. On June 7, it closed at just 36 cents. If the company can’t find a way to boost the price significantly from current levels, a reverse split may be inevitable. The company reported just $81 million in revenue and a net loss of $24.8 million last quarter. Microvast’s short interest is over 16.3% of its float.

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Lucid Group Inc. (LCID)

Lucid is an EV pure-play that went public via a special purpose acquisition company merger in July 2021. Lucid is another EV stock that has been a massive flop for investors and a home run trade for short sellers. Lucid shares are down more than 70% since the company went public, and Lucid recently announced it is laying off 6% of its employees. The high prices of Lucid’s luxury EVs may limit their mass appeal, and the company reported just 1,967 vehicle deliveries in the first quarter. Ortex estimates 27.5% of Lucid’s float is held in short positions.

Beyond Meat Inc. (BYND)

Plant-based protein company Beyond Meat has had a disastrous few years. The company reported another 18% year-over-year drop in revenue in the first quarter as its sales losses accelerated once again. The stock is down nearly 95% 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 industry. Beyond Meat’s short interest is 38.4% of its float, suggesting potential for a major short squeeze at some point.

ProKidney Corp. (PROK)

ProKidney is a clinical stage biotechnology company focused on developing therapies to treat chronic kidney disease (CKD). From August to October 2023, the stock dropped from about $13 to below $2. Positive trial data from Novo Nordisk’s blockbuster weight loss and diabetes drug Ozempic in preventing CKD hit dialysis and CKD stocks like ProKidney hard. In addition, high-profile investor Chamath Palihapitiya sold off the majority of his stake in the company, undermining investor confidence. The stock has since recovered to $3.19 per share as of June 7, but short sellers aren’t buying the rebound. ProKidney’s short interest is 22.9% of its float.

Cassava Sciences Inc. (SAVA)

Cassava Sciences is a biotech stock developing potential Alzheimer’s disease treatment simufilam. Cassava has reported encouraging data on simufilam, but short sellers have questioned the integrity of that data. In November 2021, the Journal of Neuroscience said it found no evidence of data manipulation in a 2012 paper that Cassava says was “foundational” to simufilam. Cassava demonstrated its short squeeze potential when the stock skyrocketed from under $7 in late December 2020 to above $120 by July 2021. Today, the stock is back under $20. SAVA’s short interest is currently 27.5% of its float, according to Ortex.

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

Update 06/10/24: This story was previously published at an earlier date and has been updated with new information.

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