Clean Energy Fuels collects and transports natural gas produced by animal waste from, among other sources, dairy farms. The stock soared 37% this past Wednesday, after rising 22% the prior week, prompting one Reddit poster to cheer: “Can you smell the cow poop and the Benjamins this morning?”
The company sells both renewable and conventional natural gas; its largest shareholder is French energy giant TotalEnergies. Beyond the chuckles and some nice thoughts about its business model, the chatter focused on the stock’s short interest. High short interest suggests a short squeeze—in which traders betting against a stock are forced to buy back shares, which they had borrowed and sold, out of fear that a rising price will wipe them out.
Clean Energy is starting to resemble other recent short squeezes. Some 11 million shares—8.35% of its float—had been shorted on Wednesday, wrote Ihor Dusaniwsky, managing director at S3 Partners, in an email. Short interest has climbed with the share price, and short sellers are down $21 million over the past week. But it could be worse. More than 20% of AMC Entertainment shares were shorted last month. Clean Energy has a 55 out of 100 in S3’s Squeeze Risk Score Metric, “meaning there’s a strong potential for a squeeze, but pressure to buy-to-cover has not become overwhelming yet.”
Clean Energy issued stock on May 10 and June 7, selling 22.8 million shares in all, adding more than 10% to its April 30 share count. Clean Energy didn’t respond to a request for comment, but in a securities filing it said it has no plans to raise more capital.
Last Week
Return to the Meme
Meme stocks returned, including some new Reddit favs, Clover Health, Clean Energy Fuels, and Wendy’s, while the indexes drifted and Treasury yields fell back. Consumer prices rose 5% in May, the most in 13 years, and the S&P 500 index set two records. On the week, the Dow Jones Industrial Average lost 0.8%, to 34,479.60; the S&P 500 was up 0.4%, to 4247.44; and the Nasdaq Composite rose 1.8%, to 14,069.42.
Global Taxes
Group of Seven ministers endorsed a global corporate tax plan, and kicked it over to the Group of 20 and the 137 nations convened by the Organization for Economic Cooperation and Development. The plan sets a minimum tax rate of 15%, and opens the door to taxing digital profits, which has created tensions between the U.S. and Europe. Potential roadblocks quickly appeared: China in the G20 and GOP opposition in Congress.
A Controversial Approval
The Food and Drug Administration approved an Alzheimer’s drug from Biogen, Aduhelm—the first new treatment in 18 years. The approval was controversial. The drug does not cure Alzheimer’s, and evidence for its efficacy is mixed; the FDA gave approval across a broad range of patients but told Biogen to engage in a follow-up study. And the price is high: $56,000 a year. Biogen shares rose 38% on Monday. Up next: Eli Lilly.
A Skeptical SEC
Meme stocks old and new stirred, but Securities and Exchange Commission chief Gary Gensler was not impressed. At a Wall Street Journal conference, he expressed skepticism at the payment for order flow that made zero-commission trading possible, and talked of rethinking “market structures.” On CNBC, he questioned crypto.
FBI Does Tech
The Department of Justice nabbed $2.3 million of the $4.4 million Bitcoin ransom paid out to Russian hackers in a ransomware attack on Colonial Pipeline—the first such recovery ever made. The FBI was able to empty a digital wallet with Bitcoin after obtaining a private key. Separately, law enforcement agencies announced 800 arrests in 16 countries from a three-year investigation using an app designed by the FBI, which organized crime figures thought was a secure form of communication. It wasn’t.
Senate Stalemate
Voting rights and infrastructure bills struggled in the Senate, with little Republican support, and Sen. Joe Manchin, the West Virginia Democrat, demanding bipartisanship. The Senate voted for $250 billion to fund tech research and development, mostly against China.
Annals of Deal Making
Blackstone, Carlyle, and Hellman & Friedman nailed one of the biggest private-equity deals since the financial crisis, buying medical supplier Medline Industries for $34 billion, including debt. The group beat out the private-equity arm of Brookfield Asset Management. Private equity has some $1.6 trillion in dry powder…Blackstone also agreed to take data-center operator QTS Realty private for $6.7 billion…KKR said it would pay $4.5 billion to Macquarie Infrastructure for airline servicer Atlantic Aviation…Public banking app Dave agreed to be bought by a SPAC, for $4 billion…Canada officially killed the Keystone XL Pipeline.
Write to Avi Salzman at [email protected]
