Potential short squeeze plays have gained steam in 2021 with new retail traders looking for the next GameStop Corp (NYSE: GME) or AMC Entertainment Holdings Inc (NYSE: AMC).
A short squeeze can occur when a heavily shorted stock rises in value instead of falling. Short sellers could be looking to close out their position and can face a loss if they have to buy back the shares they initially borrowed at a higher price.
Fintel Data: Data from Fintel, which requires a subscription, provides a look at some of the top shorted stocks and data that shows how likely a short squeeze is to happen.
Here is a look at Fintel’s top five short squeeze candidates for the week of Oct. 18.
Progenity: Biotechnology company Progenity Inc (NASDAQ: PROG) has been a popular and trending stock over the last several weeks. Fintel reports the stock now has 22.4% of its float shorted. Raw short interest in Progenity is up 185% in the last month and up 316% since the end of July. The borrow fee is 74.6% on shares.
Shares climbed from $0.66 to $2.70 last week. Fintel points to a battle between short sellers and meme-stockers in Progenity.
Digital Brands: Direct-to-consumer brand company Digital Brands Group (NASDAQ: DBGI) comes in second on Fintel’s list with a score of 95.94. The stock has 18.8% of its free float shorted. Raw short interest in Digital Brands is up 973% in the last reporting period. The borrow cost is 37.1% in shares. Fintel reports that there is 3.4 days to cover.
Related Link: 5 Short Squeeze Candidates To Watch: Bit Digital, Camber Energy Rejoin The List
Vinco Ventures: No stranger to the Fintel top short squeeze candidates, Vinco Ventures Inc (NASDAQ: BBIG) comes in third on this week’s list. After not appearing last week, Vinco Ventures is back with a score of 95.46 and a float that is 24.4% short. FIntel reports the cost to borrow is 31.8% and some reporting that there are no shares available to borrow.
Red Cat Holdings: Small cap Red Cat Holdings Inc (NASDAQ: RCAT) is involved in the drone industry. The company saw shares soar from around $2.15 to over $4 on news of a NASA contract for one of its subsidiaries. The stock has 12.5% of its float traded short and a borrow cost of 30.3%. Raw short interest in Red Cat shares is up 432% in one month, according to Fintel.
Paltalk: Communications company Paltalk (NASDAQ: PALT) rejoins the top five short squeeze candidates list. Fintel reports 7% of the float shorted, the lowest percent of the top five. Shares have the highest borrow fee of the top five at 148.3%, making the stock a possible short squeeze. A 1.4 million share offering could lower the chances of a squeeze as the float will increase and shorted float could drop further.
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